Posts Tagged ‘Uganda Revenue Authority’

The quality of a country’s policies and governance depends on the strength of its Institutions and those appointed to led in those institutions. The ongoing Parliamentary inquiry into the Presidential Handshake tells you how easy it is for a patronage system to misuse institutions to share or loot resources meant for the entire nation.
As a country, we have a crumbling economy that was brought due to systematic indolence and incompetence. In a normal functioning country, institutions can easily change their policy instruments to be able to rectify emerging problems or challenges. In a serious country where good governance is taken seriously heads roll, people lose jobs for abusing their authority.
Power is in the hands of a certain socio-economic group, that controls institutions to their benefit rather than the entire population of Uganda. The fact that millions of dollars were signed off to the pockets of a few people using unlawful means entirely reveals the oil presidential handshake a true image of a patronage led economy and an act that has robbed the entire population.
The Presidential Handshake is just but the smallest question in the oil tax scandal that Ugandans should be asking. The question is why should a tax body Uganda Revenue Authority whose job was to make sure that Uganda gets her taxes amounting to US$407 million in capital gains tax in a such a big case that had been heard and won before Uganda Tax Appeals tribunal be pulled out from the same court where Uganda won a case against Heritage Oil? The precedent set by the Heritage Oil case would have been the guiding principle to stay the Tullow Oil versus Uganda Revenue Authority case in the same court hoping to win it for Uganda.
The reason Government of Uganda took this case to the International Tribunal they were convinced they had a good case, why would they go in for settling out of court through a confidential Memorandum of Understanding with Tullow Oil for a lesser amount?
On 15 March 2011, they rushed to the International Tribunal and applied to withdraw the case and settle of out of court? And Tullow made an announcement on their website; Tullow settles Capital Gains Tax dispute in Uganda
We are setting our eyes on just US$20 million but there is a problem, those who might have benefitted from the out of court settlement must have walked away with millions of dollars close to US$157 million. We must ask serious questions in whose interest was that memorandum of understanding between Tullow Oil and Government of Uganda? Why has that Memorandum of Understanding been never made public? Was it a private or personal document and yet it was made on behalf of the people of Uganda?
So this so called Presidential Handshake is just a mirror of other handshakes and that is why it points back to the patronage. You see if that case had not been tampered with, the money it would have brought would have benefited the entire population, but because we are living in a patronage led economy the economic fortunes of many are shared with those who they know rather than what they know and can do for the whole country. The continual circumvention of the tax laws is abused in order to favour their group.
If you look at the way the list was generated the biggest number of the beneficiaries depend on the good will of their master and personal contacts within the group. You have seen that everyone is questioning how the list was generated but no law was followed in generating the list and so the same happened with the way they accessed public funds to reward themselves. That group of people have a problem with a well-functioning government and institutions, that would make it difficult for them to be able to circumvent the laws for their personal gains.
We live in a system that does not care about educational qualifications, that doesn’t care about hiring people on merit because of their skill-set, where institutions are led and controlled by a certain class of people and the socio-economic group that is interested in enriching themselves as opposed to serving the population. This group is behind the Presidential handshake on oil and their role is to cover up for the bigger handshake.
We must ask the real tough questions regarding our oil money. Over US$180 Million was stolen and that is what we should be looking for not just US$20 Million.

Hon. Maria Kiwanuka

Hon. Maria Kiwanuka – Minister of Finance

Today I was privileged to be part of the conference organized by Global Rights Alert and Oil in Uganda on Extractive Industries Transparency Initiative – EITI a mechanism that fosters transparency amongst oil companies and oil producing countries. This is meant to create an avenue where the people of a given country see through the oil revenue and proceeds in a transparent manner that creates no suspicions or even could turn out to be a source of conflict in any country where transparency has lacked.

This conference opened by the remarks from the Vice Chairman of the committee on oil Hon. Michael Mawanda of Igara West MP also Member of Parliamentary Forum on Oil and Gas (PFOG) who invited the Hon. Peter Lokeris, Minister of State for Mineral Development. And in his words; “This conference comes at the right time when government is preparing to enact more laws to regulate the oil sector. Transparency is key in making sure the oil sector moves in the right direction.”

Uganda estimates to have more 3.5 billion barrels and US$0.2 billion so far has been invested in the oil sector. According the existing legislation, Uganda is expected to start a national oil company but there is fear that the process of the company is not on the table yet transactions are being carried out.

There is fear that the oil proceeds will be all kept in the consolidated fund, where taxpayers’ money has never been safe at least not when the president of Uganda still harbors strong financial indiscipline towards taxpayer’s money. The Minister of Finance Hon. Maria Kiwanuka reviewed that the proceeds of oil will be sent to the consolidated fund as she made her remarks and presented on Government’s preparedness for transparency in the oil sector. As a citizen I may ask what grantee I have if the president raided the consolidated fund in the past and went ahead to purchase jet fighters without the approval of Parliament. (more…)