Musinguzi stated that URA was not satisfied with the court decision and has already initiated the legal process to appeal the case.
The Uganda
Revenue Authority (URA) Commissioner General John Musinguzi has revealed that
the tax body has initiated an appeal process against the High Court ruling that
favored Heritage Oil in an over-a-decade-long tax dispute case.
While speaking to journalists, Musinguzi stated that URA was not satisfied with the court decision and has
already initiated the legal process to appeal the case together the Attorney General.
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ourt, as well as in
arbitration in London. “There is no need for alarm. This is the same old case
that was rule
He added
that URA has been favored thrice in this same case: first in the Tax Appeals
Tribunal, then in the first attempt in the High Court, as well as in
arbitration in London. “There is no need for alarm. This is the same old case
that was ruled on by the Tax Appeals Tribunal, where Heritage’s claim not to
pay CGT was dismissed with costs. Their appeal to the High Court was also
dismissed, and they went for arbitration in London.”
Musinguzi
revealed that arbitration on all the grounds agreed with URA, and the
Government of Uganda was awarded USD 4 million. “As far as I know, Heritage has
never paid that money,” he stated, adding, “This was one of our grounds of
objection as URA, seeking payment of this award first because we had been
looking for them in vain.”
The
Commissioner General further noted that this case is appealable, emphasizing
that it’s the same case URA has successfully won under various legal
frameworks. “It’s not fair that somebody comes here, makes an investment, and
when they earn, they refuse to pay tax,” he added.
URA is
supposed to pay UGX 709 billion to Heritage Oil and Gas Ltd for erroneously
slapping a Capital Gains Tax of UGX 164.4 billion and UGX 542.5 billion in
interest after the oil company sold its exploration stake in Uganda to Tullow
Oil.
The Commercial Division of the High
Court, presided over by Justice Susan Abinyo on 23rd December 2024 ordered URA to refund Heritage Oil refund the excess money it had collected in Capital Gains Tax. This followed an appeal of the 2010 Tax Appeals Tribunal decision that
favored URA.
“Accordingly,
this court makes the following declarations and orders: 1) The computation of
the Capital Gains Tax excludes the sum of USD 150 million, which formed part of
the cost base and is therefore not subject to tax. 2) The respondent shall
compute the Capital Gains Tax by the order in (1) above, and the appellant
shall be entitled to a refund of the excess sum in the contested amount
herein,” the ruling reads in part.
It further
states, “The computed amount in (2) above, and as required under section 31 (2)
of the Tax Appeals Tribunal Act, Cap. 341 (Revised Laws of Uganda, 2023
Edition), the respondent shall pay statutory interest to the appellant on the
excess tax at a rate of 2 percent per month, prescribed in section 123(4) of
the Income Tax Act, from the date the appellant paid the excess tax till the
respondent refunds the tax in full.”