Some of the officials that shared Shs 6billion after winning the Oil tax Case
Uganda Revenue Authority (URA) made payments of over Shs 6bn to high ranking government officials in different ministries as a reward (akasiimo) for winning the Capital Gains Tax (CGT) case against Heritage.
There were two separate cases.
In Tullow’s farm-down to CNOOC and Total, Tullow made a capital gain which would have been taxable.
But in accordance with the Production Sharing Agreement which expressly provided for it as an investment incentive to Tullow, Energy Minister Syda Bbumba issued a Capital Gains Tax exemption with written authority of the Attorney General and Cabinet, under her powers against the petroleum laws.
Allen Kagina, acting equally legally vide her powers under Income Tax Act, insisted the $430 million tax be paid.
Tullow lost the case in the Tax Appeals Tribunal (TAT) and appealed to the High Court as well as an International tribunal for the settlement of investment disputes.
Government of Uganda opted to settle out of court for a lower sum of $250m because the international tribunal had always ruled in 13 prior cases that governments cannot take away from investors with one hand, what they have given with another hand.
It is understood Uganda would have lost the case in London.
Tullow opted to pay something because it had lost the case in the Uganda Tax Appeals Tribunal and needed to resolve a separate VAT dispute with URA worth $2.5bn.
Museveni was in favor of upholding the exemption, which he had authorized, but was totally defied by Kagina who assured him he could uphold petroleum laws but had no power to direct her to defy the Income Tax Act.
So Museveni back-tracked on Tullow who opted to settle at $250 million.
It’s the Heritage case for which the Shs6bn “honorarium” has been paid to public officials.
When Heritage sold out to Tullow, it too made a Capital Gain which was taxable at 30 percent. Unlike Tullow, Heritage had no exemption granted to it but fought a long legal battle to dodge the tax.
Kagina and other officers fought hard and beat Heritage in the British courts.
Tullow withheld from Heritage, the tax payable to Uganda and later remitted it to URA after Uganda and Tullow jointly beat Heritage in the British courts.
ChimpReports has learned that after emerging victorious in the CGT case, URA made huge payments to government lawyers and other staff who participated in the legal battle against Tullow.
Officials said had the Ugandan government not taken aggressive steps; it would have missed millions of dollars in capital gains tax.
It is also reported that Tullow associates tried to bribe then URA boss Allen Kagina to ignore the tax but angrily turned down the offer before reporting the matter to the president.
However, questions are being asked about who authorised the questionable payments and what criterion was used in their disbursement to government officials.
According to URA’s monthly payroll of August 2016, the tax body’s Chief Executive Doris Akol received Shs 242m as a reward for winning the case.
On the same payroll, Akol received Shs 40m (gross) as her monthly salary.
Therefore in one month, Akol went home with a staggering Shs 282m (before taxes).
All the figures mentioned in this story reflect amounts of money the officials received before taxes or other deductions were subtracted.
Akol led URA’s legal department that managed the capital gains tax case before being appointed by the president to run the tax collection body.
The former Permanent Secretary in the Ministry of Energy and Mineral Development, Kabagambe Kaliisa bagged Shs 133m.
The then Deputy Attorney General, Fred Ruhindi received Shs 93m.
Interestingly, Shs 393m was wired on the bank account of former Permanent Secretary Finance Ministry, Chris Kassami after he had passed on.
Contacted, Akol asked ChimpReports to obtain a clarification from the URA spokesperson Sarah Banage.
Banage confirmed that indeed the tax body effected payments after the capital gains tax was won.
“Yes, it’s true, we paid some people basing on a directive from the Attorney General,” said Banage.
Asked what criterion was used to make the disbursements, Banage answered: “Everything was based on a directive from the Attorney General. You need to talk to his office. They have all the details.”
We telephoned Attorney General, William Byaruhanga at the end of 2016 but said he was in Hague.
He promised to follow up the matter on return to Uganda.
Efforts to obtain clarification from were yet to bear fruit as he fell short of responding to our telephone calls.
On the list of the paid government officials is the current Finance Ministry Permanent Secretary Keith Muhakanizi who received Shs 108m.
Former Attorney General Peter Nyombi received Shs 226m.
Lawrence Kiiza, a senior official in the Ministry of Finance was paid Shs 102m while Martin Mwambutsya, a Senior Attorney in the Ministry of Justice and Constitutional Affairs took home Shs 232m.
Ernest Rubondo, who heads the Directorate of the Petroleum Authority of Uganda, received Shs 266m.
Solicitor General, Francis Atoke was given Shs 234m while URA lawyer, Ali Ssekatawa got Shs 242m.
The Director of Legal Affairs at the Solicitor General’s office, Christopher Gashirabake, got Shs 242m.
Honey Malinga, who served as Vice Director of the Petroleum Exploration & Production Department (PEPD), was handed Shs 262m.
Moses Kaggwa, a Member Commissioner for Tax Policy Ministry of Finance, got Shs 234m.
Moses Kibumba, a private tax expert having formerly worked with URA for 21 years as a tax auditor, received Shs 93m.
Moses Kajubi who was serving as URA Commissioner, Domestic Taxes, got Shs 226m.
Peter Muliisa, a URA lawyer with a masters in Petroleum Taxation and Finance, was paid Shs 234m.
Rodney Golooba and Samuel Kahima, all lawyers with URA, received Shs 222m and Shs 224m respectively.
Harriet Lwabi Musoke, a senior official at Ministry of Justice and Constitutional Affairs, bagged Shs 242m while Harriet Tukamushaba who works in the same office received Shs 99m.
KCCA Director Jenifer Musisi, who had previously served as head of the legal department at URA, was given Shs 121m.
Robinah Nakakawa, a commissioner at URA, took home Shs 242m while Elizabeth Nakkungu of the Justice Ministry received Shs 238m.
Principal State Attorney George Kallemera got Shs 232M.
Others are Syson Ainembabazi of URA legal department (Shs216m), Assistant Commissioner Tax Investigations, Irene Bashabe Kyomuhendo (Shs 210m) and URA Manager Customs Audit, Agnes Nabwire.
Questions government must answer
1. Why would government officials paid handsomely to defend the people’s interests reward themselves with huge sums of money for doing the work they are paid for?
2. If indeed the money was meant to reward and motivate staff, what criterion was used to make the payments?
3. If the decision to reward these officials was administrative, how come doctors or government soldiers who save lives on a daily basis do not receive bonuses?
4. If these payments were in good faith, why wouldn’t URA and Attorney General’s office share this information with the public in the spirit of accountability?
Note: This story has been slightly edited to reflect the actual figure of the bonuses as Shs 6bn not Shs 7bn as earlier indicated and more background information about the Heritage case has been added – ED.
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