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Chamber of Mines and Petroleum Pushes for Tax Exemptions

The body contends that the taxes present additional funding requirements to companies involved in these sectors. It adds that these taxes are a deterrent for long-term and capital intensive projects.
PM Dr Rugunda(R) chairing Inter -ministrial meeting at OPM on Monday (Photo by PMPU).JPG Displaying PM Dr Rugunda(R) chairing Inter -ministrial meeting with council of Uganda chamber of mines and petroleum(UCMP), (middle) Karuhanga & Kaijuka (L) Chair & V
Uganda Chamber of Mines and Petroleum (UCMP) is advocating for reforms in the tax regime to allow exemption of Value Added Tax (VAT) and Withholding Tax during the investment phase of oil, gas and mineral projects.

The body contends that the taxes present additional funding requirements to companies involved in these sectors.  It adds that these taxes are a deterrent for long-term and capital intensive projects.

UCMP Council led by its Chairman, Elly Karuhanga made the request to Government during an Inter-Ministerial meeting chaired by the Prime Minister, Dr. Ruhakana Rugunda this afternoon. The meeting at the Office of the Prime Minister was convened to review progress made since the first Presidential Retreat on mineral value addition held in December last year.

“There is a challenge as to whether companies should be taxed on exploration even when they are not sure of finding oil,” Karuhanga said.

Premier Rugunda said Government was focused on creating a competitive investment climate, adding that Cabinet would consider new proposals in the legal regime that would be worked on by the relevant sectors early next year.

The Premier also assured the meeting that issuance of mineral exploration licenses will be streamlined and the previous allocation procedure based on ‘first come, first serve' invalidated.

“Cabinet has asked the Minister for Minerals to present the matter and a decision will be taken even if it requires amending the law to streamline allocation of licenses,” Rugunda said allaying fears that many licenses were given to wrong people.

The meeting, also attended by State Minister for Minerals Peter Lokeris and that for Privatization, Aston Kajara, agreed to fast-track the establishment of the National Mineral Exploration and Mining Company.

It was also agreed that Government expedite the Investment Code Amendment Bill to turn Uganda Investment Authority into a one-stop centre for investment licensing.