Sunday, 20 March 2022 06:00

How govt will earn from oil, gas sector

What you need to know:

  • Income. Government has provided a number of taxes under the Income Tax Amendment Bill through which Uganda will earn from the oil and Gas sector as a country.  

Now that the oil development stage has started, it is easier to connect the dots on how the private sector will directly benefit from the resource. 

A number of contracts have been drawn while hundreds or even thousands of others, are still in the pipeline. 

However, beyond individual or company level benefits, the question is; how does Uganda, as a country, earn from the oil and gas sector?

Pamela Natamba is the head of oil and gas division at PricewaterhouseCoopers (PwC). 

In her assessment, as a country, during the development stage, Uganda will mainly earn through taxes, given that there will be no commercial production until 2025. 

Therefore, she notes, such earnings have been provided for in the Income Tax Amendment Bill, which particularly focuses on the oil and gas sector. 

“That Bill has made specific provisions, but one of them which is very interesting is it introduces a Windfall Tax,” she says and notes that this tax will apply to licensees that have signed Petroleum Sharing Agreements, many of which have been involved in exploration up to the point of production. 

These, she says, include large companies such as TotalEnergies, CNOOC and Uganda National Oil Company (UNOC), among others. 

What the Bill puts in place, Natamba says, is that as long as you earn revenue in excess of a certain amount, you will be subjected to a Windfall Tax. 

For instance, she explains, if international oil prices are expected to go for a certain amount you a company sells beyond what has been projected, the expectation is, the company will pay an extra tax over and above 30 percent. 

 

Published in Energy
Monday, 06 December 2021 00:00

Uganda-DRC roadworks set to start

The Democratic Republic of Congo (DRC) has officially handed over crucial sites to Dott Services Ltd, a Ugandan construction firm, to commence the long-awaited surfacing of the 223km-road network in eastern DRC.
According to the statement released by the Works ministry last evening, the construction is expected to start this week.
The DRC roads to be constructed include Mpondwe/Kasindi- Beni (80km), Bunagana-Rutshuru-Goma road (89km) and Beni-Butembo Axis (54km).

The project is branded as the regional connectivity roads project, also known as DRC roads project.
The handover ceremonies, which took place in Beni and Goma in the North Kivu Province last  Friday, were witnessed by two delegations from Uganda and DRC, including the leadership of the Dott Services.
The Ugandan delegation was led by  the Works minister, Gen Katumba Wamala, while the DRC delegation was led by the Infrastructure minister, Mr Alexi Gisaro Muvunyi.

The handover of the sites came on the heels of a visit to the company’s Inland Custom Deports (ICD) at Namanve Industrial Park in Uganda last Wednesday by the steering committee of nine members composed of technical officials from DRC, Uganda and Dott Services Limited, which was set up to fast-track the project.
Gen Katumba appealed to Congo nationals to support the construction.
“Do not steal the road equipment. Do not touch the fuel and other essentials. This opportunity has come to you to benefit from it in a meaningful way. Please give all the support to the contractor and work with them to ensure that the project succeeds,” he said.
Gen Katumba also cautioned the construction company to be mindful of deadlines.

In his remarks, Mr Muvunyi revealed that the project would boast trade and employment for the two countries.
The North Kivu Governor, Lt Gen Ndima Kongba Constant, said: “When the contractor is hungry, give him food. When he is thirsty, give him water, when he needs a room, give him a bed to sleep on. This is because they have come to not only to build roads but also to improve our livelihoods.” 

So far, Dott Services Limited has assembled 40 trucks, 22 rollers, 22 graders, and 22 excavators and 20 fabricated containers to cover office space and residences for the company staff.
The company has also promised to move this equipment to the designated sites in DRC this week.

Background
In May, Uganda and DRC signed two agreements aimed at enhancing bilateral trade as well as strengthen infrastructural development.
The agreements followed the state visit to Uganda by DRC president Felix Antionè Tshisekedi from November 9 to 10, 2019. The presidents emphasised the importance of developing cross-border infrastructure which is essential to facilitate bilateral trade.
Despite the lucrative business opportunities between the two countries, trade in the past has been hampered by poor road network.
The roadworks come barely a week after Uganda’s army launched airstrikes into bases habouring rebels of the ADF in eastern DRC.
 

Credit: Daily Monitor

Published in Politics