MPs want Onek to explain oil tax
Apr 26, 2011
PARLIAMENT has asked Hilary Onek, the energy minister to explain the capital gains tax levied on petroleum pre-production assets.
By Ibrahim Kasita
PARLIAMENT has asked Hilary Onek, the energy minister to explain the capital gains tax levied on petroleum pre-production assets.
The move is aimed at ensuring that the public is informed and empowered to hold the leaders accountable.
Uganda has already received $469m as capital gains tax from the sale of blocks 1 and 3A by Heritage Oil to Tullow Oil.
More $472.7m is expected from another deal involving Tullow, China’s National Offshore Oil Corporation (CNOOC) and France’s Total.
But the legislators want to know how the money will be managed for the benefit of the people.
The query followed Onek’s statement to Parliament on the progress of the agreement reached between the Government and Tullow Oil to defuse the tax dispute and the proposed $2.9b Tullow-Total and CNOOC transactions.
“The issue of oil is about life and death,†Beatrice Anywar, the Kitgum district Woman MP, said.
“We are talking about the future of this country. We need to know the details and stage by stage, on how we are going to manage the high expectations and high relief to poverty.â€
She pointed out that as lawmakers, they had not got the details of the production sharing agreements to understand how the oil wealth would be managed.
“We need full details on how the production is going to be managed and how the revenue accruing from production is going to be managed,†Anywar demanded. Henry Banyenzaki, the Rubanda County MP, was concerned about the secrecy in the petroleum industry.
“The problem in this sector is there is no transparency,†he noted. “As Parliament, we cannot competently debate this statement of the minister without seeing those production sharing agreements.
“Why are you keeping this information a secret if you did a good deal for Ugandans?â€
Banyenzaki noted that Parliament was ‘hurriedly’ made to pass the Income Tax Amendment Bill by a committee of Parliament, which based its decision on the production sharing agreements.
“I implore Parliament to take interest in this matter of the oil and gas sector and in this policy,†he urged.
“These bills which are before Cabinet are very urgent Bills that this Parliament should have passed before we finish this term.
“If we had done that, it would have been a package,†Banyenzaki added.
Cabinet has approved two Bills – The Petroleum Resource Management Bill and the Petroleum Revenue Management Bill – awaiting Parliament deliberations before it is passed into law.
Stephen Mukitale, the MP for Buliisa County, said the Bills “are so critical and this process needs to be very consultative.â€
“Managing anxiety in this sector is very important. Let the people know your intentions, the spirit and principles within the Bill,†he requested.
“I would request that an appropriate time, before the Eight Parliament closes and we go to the 9th Parliament, we are given this information so that Ugandans get to know.â€
Confirmed oil reserves in Uganda are about 2.5 billion barrels but are expected to reach five billion barrels. Uganda intends to create a special fund, where oil revenue will be separately deposited in a bid to avert economic instability arising from the discovery of oil reserves.
PARLIAMENT has asked Hilary Onek, the energy minister to explain the capital gains tax levied on petroleum pre-production assets.
The move is aimed at ensuring that the public is informed and empowered to hold the leaders accountable.
Uganda has already received $469m as capital gains tax from the sale of blocks 1 and 3A by Heritage Oil to Tullow Oil.
More $472.7m is expected from another deal involving Tullow, China’s National Offshore Oil Corporation (CNOOC) and France’s Total.
But the legislators want to know how the money will be managed for the benefit of the people.
The query followed Onek’s statement to Parliament on the progress of the agreement reached between the Government and Tullow Oil to defuse the tax dispute and the proposed $2.9b Tullow-Total and CNOOC transactions.
“The issue of oil is about life and death,†Beatrice Anywar, the Kitgum district Woman MP, said.
“We are talking about the future of this country. We need to know the details and stage by stage, on how we are going to manage the high expectations and high relief to poverty.â€
She pointed out that as lawmakers, they had not got the details of the production sharing agreements to understand how the oil wealth would be managed.
“We need full details on how the production is going to be managed and how the revenue accruing from production is going to be managed,†Anywar demanded. Henry Banyenzaki, the Rubanda County MP, was concerned about the secrecy in the petroleum industry.
“The problem in this sector is there is no transparency,†he noted. “As Parliament, we cannot competently debate this statement of the minister without seeing those production sharing agreements.
“Why are you keeping this information a secret if you did a good deal for Ugandans?â€
Banyenzaki noted that Parliament was ‘hurriedly’ made to pass the Income Tax Amendment Bill by a committee of Parliament, which based its decision on the production sharing agreements.
“I implore Parliament to take interest in this matter of the oil and gas sector and in this policy,†he urged.
“These bills which are before Cabinet are very urgent Bills that this Parliament should have passed before we finish this term.
“If we had done that, it would have been a package,†Banyenzaki added.
Cabinet has approved two Bills – The Petroleum Resource Management Bill and the Petroleum Revenue Management Bill – awaiting Parliament deliberations before it is passed into law.
Stephen Mukitale, the MP for Buliisa County, said the Bills “are so critical and this process needs to be very consultative.â€
“Managing anxiety in this sector is very important. Let the people know your intentions, the spirit and principles within the Bill,†he requested.
“I would request that an appropriate time, before the Eight Parliament closes and we go to the 9th Parliament, we are given this information so that Ugandans get to know.â€
Confirmed oil reserves in Uganda are about 2.5 billion barrels but are expected to reach five billion barrels. Uganda intends to create a special fund, where oil revenue will be separately deposited in a bid to avert economic instability arising from the discovery of oil reserves.