Heritage, URA settle tax row
Jul 19, 2010
THE sh18b tax dispute that pitted oil explorer, Heriatge Oil against the Uganda Revenue Authority (URA) has been resolved. “We have reached a settlement. Only the issue of costs remains outstanding. I pray we be allowed a day to do this,†Edwin Karugire, the Heritage Oil lawyer, told the Commerc
By Hillary Nsambu
THE sh18b tax dispute that pitted oil explorer, Heriatge Oil against the Uganda Revenue Authority (URA) has been resolved. “We have reached a settlement. Only the issue of costs remains outstanding. I pray we be allowed a day to do this,†Edwin Karugire, the Heritage Oil lawyer, told the Commercial Court on Thursday.
Justice Geoffrey Kiryabwire of the Commercial Court, however, warned that the case file will not be closed until Heritage Oil gives court evidence that it has cleared the costs.
Ali Ssekatawa represented URA. Heritage Oil sued URA and Barclays Bank seeking to stop the tax collectors from forcing the bank to pay over sh18b as withholding tax from Heritage’s account.
According to Patrick Sawczyszyn, the company’s finance manager, Heritage Oil in January paid over sh5.6b to URA as withholding tax that was not in dispute. After this, the firm and URA agreed to review and reconcile the disputed tax figures that had been assessed as withholding tax.
He, however, added that during the process, the tax body gave Barclays Bank a fresh order to pay over sh18.3b as the new withholding tax Heritage was expected to pay. The oil firm rejected it.
Sawczyzyn said URA had demanded to be paid the disputed monies within six days, which they saw as unreasonable, hence the suit. The company had argued that even if it was to pay, it would have done so in 45 days as per the Income Tax Act guidelines. The court was told that despite that strong objection, URA “disregarded the law and went ahead to issue a ‘third party’ notice.†This is an order to the bank to pay the monies from a company’s account without further notice.
Heritage Oil, therefore, went to court seeking an injunction to stop URA’s “illegal and arbitrary third party notice to Barclays Bank, forcing it to pay the disputed withholding tax from its account. Heritage Oil had also argued out that if the tax body’s orders had been enforced, it would have affected its oil exploration plan obligations with the Government, and jeopardised its business in Uganda.
However, according to an affidavit of Robinah Nakakaawa, the URA’s natural resources management unit boss, they carried out a PAYE and the withholding tax assessment for 2006 and found outstanding liabilities against the firm.
She said during the reconciliation meetings in December 2008, URA communicated its findings on PAYE and withholding tax to the company.
THE sh18b tax dispute that pitted oil explorer, Heriatge Oil against the Uganda Revenue Authority (URA) has been resolved. “We have reached a settlement. Only the issue of costs remains outstanding. I pray we be allowed a day to do this,†Edwin Karugire, the Heritage Oil lawyer, told the Commercial Court on Thursday.
Justice Geoffrey Kiryabwire of the Commercial Court, however, warned that the case file will not be closed until Heritage Oil gives court evidence that it has cleared the costs.
Ali Ssekatawa represented URA. Heritage Oil sued URA and Barclays Bank seeking to stop the tax collectors from forcing the bank to pay over sh18b as withholding tax from Heritage’s account.
According to Patrick Sawczyszyn, the company’s finance manager, Heritage Oil in January paid over sh5.6b to URA as withholding tax that was not in dispute. After this, the firm and URA agreed to review and reconcile the disputed tax figures that had been assessed as withholding tax.
He, however, added that during the process, the tax body gave Barclays Bank a fresh order to pay over sh18.3b as the new withholding tax Heritage was expected to pay. The oil firm rejected it.
Sawczyzyn said URA had demanded to be paid the disputed monies within six days, which they saw as unreasonable, hence the suit. The company had argued that even if it was to pay, it would have done so in 45 days as per the Income Tax Act guidelines. The court was told that despite that strong objection, URA “disregarded the law and went ahead to issue a ‘third party’ notice.†This is an order to the bank to pay the monies from a company’s account without further notice.
Heritage Oil, therefore, went to court seeking an injunction to stop URA’s “illegal and arbitrary third party notice to Barclays Bank, forcing it to pay the disputed withholding tax from its account. Heritage Oil had also argued out that if the tax body’s orders had been enforced, it would have affected its oil exploration plan obligations with the Government, and jeopardised its business in Uganda.
However, according to an affidavit of Robinah Nakakaawa, the URA’s natural resources management unit boss, they carried out a PAYE and the withholding tax assessment for 2006 and found outstanding liabilities against the firm.
She said during the reconciliation meetings in December 2008, URA communicated its findings on PAYE and withholding tax to the company.