Uganda Revenue Authority
The Uganda Revenue Authority (URA) was established by the Uganda Revenue Authority Statute of 1991 and set up in September in the same year as the central body for the assessment and collection of revenues. The URA administers and enforces laws relating to tax revenue and accounts for all the revenue to which all those laws apply, and also advises the government on matters of policy relating to all revenue. A Makerere University report said that historically, the URA has had a low rate of tax collection because of inefficiency in collection, corruption and lack of compliance by eligible payers.
Role in oil and gas sector
Uganda's National Oil and Gas Policy states that the role of the URA in the oil and gas sector is to:
- Administer the collection of revenue from oil and gas activities in line with the relevant laws
- Assist in monitoring and assessing the impact of oil and gas revenues on the economy.
- Participate in the formulation of tax measures to regulate collection of the right revenues from oil and gas activities.
The body is a member of the National Petroleum Technical Committee and so also has input on matters of petroleum policy. The URA has a unit to handle oil revenues, which deals with the registration, return filing and payments. According to Martin Muhangi, the URA's Oil and Gas Unit Manager, the body has registered all five oil companies and 12 sub-contractors currently involved in Uganda’s oil and gas sector. Mugangi said the URA is waiting for Uganda's Public Finance Bill to be passed by Parliament so that its role can be improved. Mugangi also said in late 2012 that the URA was in the final stages of working on an e-tax model to support the processing of oil and gas returns.
Tax dispute with Heritage
The URA became involved in a tax dispute with Heritage Oil when the company sold its petroleum assets in Uganda to Tullow Oil. Heritage in December 2010 announced its intention to transfer its Ugandan petroleum assets to Italian oil company Eni; Tullow, which had a 50% stake in the assets, exercised its first right of option to buy the assets held by Heritage for $1.5 million. Before the deal was approved, the URA demanded Heritage pay the government 30% of the $1.5 million deal in capital gains tax. The company demanded to settle the tax dispute via the International Court of Arbitration in London, but Uganda's High Court eventually ruled that the case be heard in Uganda. In November 2011, the Tax Appeals Tribunal in Uganda ruled that the Heritage-Tullow transaction was taxable and the amount ($434.9 million) assessed by URA remains the same. According to New Vision news agency, the ruling meant that future such transactions - such as Tullow's farmdown of two-thirds of its assets to Total S.A. and CNOOC in February 2012 - would be taxable.
Official website: www.ura.go.ug
- “Effects of Taxation on Economic Growth (Uganda's Experience: 1987-2005)” Makerere University, November 2012.
- "National Oil and Gas Policy for Uganda", Ministry of Energy and Mineral Development, February 2008.
- “URA ready to handle Uganda’s Oil revenue” The Independent, 4 December 2012.
- “Uganda wins $435M oil case against Heritage” New Vision, retrieved 10 January 2012.