MPs Form ‘Group for Action’ Against Tullow Tax Cash Bonanza

A total of 30 Members of Parliament led by a Commissioner have formed a group to demand for action against senior government officials who awarded themselves over Shs7bn for winning the capital gains tax case against Tullow Oil.

The Parliamentary Commissioner, dosage Peter Ogwang who also represents Usuk County in Katakwi district, cialis 40mg together with other legislators are set to present their plans to the nation on Wednesday.

Speaking to ChimpReports at his office at Parliament, information pills Ogwang who is also from the ruling National Resistance Movement, said their main aim is to “know who authorized the exorbitant bonus payments to the already well paid civil servants and a few political leaders” who were then serving in the Executive.

“We want to clearly understand the source of the money and who exactly authorized it,” said Ogwang.

He stressed that the last Parliament approved a supplementary budget of about Shs 12bn to handle the oil tax arbitration case in London and there was no need for those who participated to get bonuses.

“What was the bonanza for when Parliament had allocated money that indeed catered for everything?” he wondered.

Senior officers named in the saga include Uganda Revenue Authority Commissioner General, Doris Akol, Kampala Capital City Authority Executive Director Jennifer Ssemakula Musisi, Finance Ministry Permanent Secretary Keith Muhakanizi and many others from Energy, Finance and the tax body.

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The publication of the article further triggered a social media firestorm with hundreds demanding that URA and Attorney General’ office open up about the controversial payments.

Highly placed sources said the judiciary and civil service staff have quietly expressed alarm at the exorbitant sums of money shared by high ranking government officials.

“There is absolutely no legal basis for such payments and there is no precedent in government,” said a senior lawyer in Kampala.

“First of all the people who used to go to London had all their expenses paid including per diem. There can never be any justification for this conduct.”

New information

It is understood that U.K.-based law firms Curtis, Mallet-Provost, Colt & Mosle LLP were paid about $10m (Shs 35bn) to represent Uganda’s case.

This matter never went to its conclusion.

Tullow had disputed the URA’s assessment of $473 million of Capital Gains Tax (CGT) payable following the farm-downs and appealed against the assessment before the Uganda Tax Appeals Tribunal (‘TAT’) and commenced an International Arbitration in September 2013.

In July 2014, the TAT rejected Tullow’s appeal and assessed Tullow’s CGT liability for the farm-downs at $407 million less $142 million previously paid.

Interestingly, Uganda and Tullow would later reach a settlement following quiet negotiations where Tullow paid $250m instead of the $473m that was the amount due as CGT.

This was confirmed in a statement issued by Tullow on June 22, 2015.

“Following constructive discussions with the Government of Uganda and the URA, Tullow has agreed to pay $250 million in full and final settlement of its CGT liability,” said Tullow.

“This sum comprises $142 million that Tullow paid in 2012 and $108 million to be paid in three equal installments of $36 million. The first of these was paid upon settlement and the remainder will be paid in 2016 and 2017.”

Tullow Chief Executive Officer, Idan Heavey was all smiles about the new development, saying, “The settlement of this long-running dispute is good news for Tullow and Uganda.”

He added: “In recent months, the Government of Uganda has proposed welcome and necessary changes to its tax regime for oil and gas investments which it is hoped will enable substantive progress to be made towards the sanction of the Lake Albert oil development.”

The government officials never explained why they settled for less during the discussions.

While officials at the Ministry of Justice and Constitutional Affairs said URA took the decision to avoid a protracted and costly legal battle with the oil firm, legal experts don’t subscribe to this school of thought.

“It was generally agreed that Uganda had a very good case. So we are “thanking” these folks for making Uganda lose $223m? This matter needs an independent investigation,” said a lawyer who preferred anonymity so as to speak freely.

Legal team well facilitated

What baffles many a Ugandan is that government initially released $1.5m for the arbitration expenses but in May 2012, then Attorney General Peter Nyombi said the money was already finished and they needed an extra Shs 5bn for the case.

Kampala Associated Advocates where Nyombi’s daughter works was selected to represent government in the same case at a cost of about Shs 2bn in legal fees.

MP Ogwang said the lawmakers’ campaign would focus on ensuring those implicated “honorably return the money and also step down to allow investigations.”

The legislators are also expected to appeal to the Speaker, Rebecca Kadaga to accord them opportunity to formally present the matter on the floor of the House.

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Additional reporting by Giles Muhame

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