URA defends UGX6bn ‘Presidential Handshake’ as International Best Practice

Uganda Revenue Authority has released a statement defending the government’s decision to award senior government officers with a UGX6billion bonus for defending the country’s interest in two legal battles that resulted in the reward of US$700m against Heritage Oil and Gas.

The International Court of Arbitration in London made two separate awards, one amounting to US$435m after Uganda defeated Heritage that had wanted to evade paying a 30 percent capital gains tax after it sold its interests in Uganda to Tullow Oil Ltd at US$1.5billion.

The bonuses paid to senior officers from URA, Ministry of Finance and Ministry of Justice and Constitutional Affairs have however sparked nation-wide outrage with many citing selfishness and abuse of office on the part of the President, his cabinet who authorised the payment of such a large sum of money even without approval from Parliament.

More importantly perhaps, the bonus, dubbed a Presidential Handshake will set a dangerous precedent where millions of civil servants who toil for years on measly pay while serving Ugandans, will feel betrayed and may start to demand for similar handshakes.

Below is URA’s Full Statement

PRESS STATEMENT

Kampala Jan 5th 2017. Following Uganda’s victory over the UK- based oil company Heritage that saw a combined total of USD700m brought into Government of Uganda coffers; in appreciation of the exemplary performance of the Ugandan team – Government through the office of the Attorney General recommended that the multi-disciplinary and multi sectoral team of officials that had participated in a core, non-core and support staff capacity be commended and appreciated by a Presidential Handshake totaling UGX6bn. The entire team came from URA, Ministry of Justice and Constitutional Affairs, Ministry of Finance, Planning and Economic Development and the Ministry of Energy and Mineral Development.

It is standard international best practice for employees to receive bonus payments/ or honoraria for exemplary performance in both the public and the private sector. Equally under the Ugandan Constitution; the President has a prerogative as a fountain of honor to reward exemplary performance and this has been exhibited in the fields of health, academia, sports to mention a few.

For the record the payments went through the necessary approvals as required by the Public Finance Management Act as amended. The Commissioner General was duly appointed as an accounting officer to disburse respective payments to designated beneficiaries after deduction of applicable taxes and other statutory deductions. The Auditor General duly issued an audit warrant to authorize spending. In accordance with the accounting officer’s mandate, the designated beneficiaries received their payments.

We have noted misconstrued information published in some dailies and online publications to the fact that payments were illegal, no approvals were obtained and that government officials ‘hatched a plan’ to share the oil bonanza. The published information is followed by an alleged list of beneficiaries that is inaccurate in terms of names and amounts attached to them. This is all incorrect. For example the following people both current and former staff of URA are erroneously included in the circulating lists namely;- Kyomuhendo Irene, Nabwire Agnes W, Nyakwera Jennipher, Nanziri Justine Stella, Wabokha Robert, Sebyala Samuel, Semombwe Charles, Patrick Mukiibi, Kateshumbwa Dicksons, Saka M Henry, and Otonga Michael Ochan.

The facts are:-

1. The team brought in a combined total of USD 700m into government coffers after a series of court battles in Uganda’s Tax Appeals Tribunal, High Court, Court of Appeal; and High Court of London, Court of Appeal of UK, and two international tribunals. This was from the Heritage transaction and the subsequent Tullow transaction.

2. The two cases were an unprecedented win for the country, and the first of its kind in Africa in the sector of Oil and Gas Taxation.
3. In appreciation of this exemplary performance; the Government of Uganda granted the team involved an Honorarium or bonus/ or golden handshake totaling UGX6bn. This represented less than 1% of the amount brought in or defended.

4. Prior to payments being done; all payments underwent the necessary approval processes as provided for under the Public Finance Management Act as amended – for close to a year.

Conclusion:
The Presidential handshake granted to the multi-disciplinary and multi sectoral team of officials was not illegal and followed all due government processes. It was meant to appreciate the professionalism and patriotism exhibited by the team members, especially their ability to resist all pressure and compromise given the magnitude of the figures involved.

For more information:

SARAH BIRUNGI BANAGE|Assistant Commissioner Public and Corporate Affairs
Commissioner General’s Office|Uganda Revenue Authority
Office: +256 417 442049|Mob: +256 (0)717 442 714
http://ura.go.ug Twitter@URAuganda Facebook@URApage
Developing Uganda Together

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