Experts have called for high taxes on the oil sector, saying the industry is more profitable than other investments.
â€œSince oil production is more lucrative than most industries, it is important for the Government to impose high taxes on the sector,â€ said Heidi Lundeberg, a volunteer with the Southern and Eastern African Trade Information and Negotiations Institute in Uganda.
This was at a public debate on oil and land policies organised by the Uganda Development Policy Management Forum at the Uganda Management Institute recently.
Lundeberg said if the exploitation of the non-renewable resource is to benefit Ugandans, its revenue should be invested in social reforms, infrastructure and development of renewable energy sources.
Lundeberg warned Uganda against speculative firms, saying in the last 10 years, many companies had signed up in the sector without having technical skills or capital.
She said the Government had to insist on high environmental and labour standards, adding that oil extraction can be extremely damaging to the environment.
The dean of the school of economics at Kampala International University, Dr. David Lameck Kibikyo, concurred with Lundeberg, saying there was need to hike taxes considering the current price of oil.
He explained that it was not necessary to give oil companies tax holidays because their earnings are big. The chairman of the National Planning Authority, Dr. Kisamba Mugerwa, said for the oil policy to have a positive impact on the economy of Uganda, there was need to align other policies with it and to develop mechanisms of sharing revenue.
Hike oil taxes, say experts