Sunday February 26 2012

Govt wants more Shs7 billion for Heritage tax case

By Yasiin Mugerwa

The Ministry of Justice has asked for an additional Shs6.7 billion to facilitate the controversial oil arbitration case in London despite failing to justify an already expanded budget for the same cause.

If granted by Parliament, it will bring the total bill to Shs18.6 billion after gobbling Shs11.9 billion already.

Heritage Oil, a British oil company, is fighting to keep $404 million (more than Shs1 trillion) in capital gains tax. While this case is important for the country, the lawmakers on the Budget Committee have questioned the supplementary request of Shs6.7 billion in additional funds before the accountability of initial one.

This new request comes after Attorney General Peter Nyombi failed to convince members on Legal and Parliamentary Affairs committee on the need to spend Shs11.9 billion on what legislators called “luxuries” in the name of an arbitration case in London.

“We need the money to defend government interests,” Justice Under-Secretary, Earnest Bafaki told the Budget Committee on Thursday. “We have to facilitate the team handling the case in London. The Attorney General and the acting Solicitor General are already in London to oversee the process. This is why we requested Shs6.7 billion under the supplementary.”

Sources told Sunday Monitor that the ministry has already spent the money and their coming to Parliament is just for formality to seek retrospective authority.

‘Money-making venture’
Leader of Opposition in Parliament Nandala Mafabi accused government of using arbitration to tap public funds.

He asked the Budget Committee to demand for expenditure details of all the funds so far spent on the London case.

“We don’t want to lose $404 million to Heritage but at the same time, our people handling this case should not take us for granted,” Mr Mafabi said. “We want to see transparency in the handling of this case. We want to know how much is needed for this case and when do we expect the judgement to be delivered. Otherwise the way it is, it appears some people have turned this case into a money-making venture.”

Seventeen officials from the Uganda Revenue Authority, Justice and Energy ministries are expected to travel to London for the case. But MPs say the number is high because government had already hired an external legal firm.

Deputy Attorney General Fred Ruhindi said figures would be revised.

Parliament has since put a caveat on the Shs11.9billion until the government justifies the expenditure.

The Budget Committee chairperson, Mr Tim Lwanga, asked Legal and Parliamentary Affairs Committee to investigate the request for the supplementary budget and report to the committee on Tuesday.

This, he said, will shape the decision on whether they approve the money or not.

Background: ‘We don’t want to lose $404 million to Heritage but at the same time, our people handling this case should not take us for granted. We want to see transparency in this case. We want to know how much is needed for this case and when do we expect the judgement to be delivered. Otherwise the way it is, it appears some people have turned this case into a money-making venture.’ Nandala Mafabi, Leader of Opposition

ymugerwa@ug.nationmedai.com

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