URA Boss to Appeal Shs166bn Refund Ruling

The Shs166 billion refund, to be paid with interest, represents a significant financial and reputational challenge for URA.

The Commissioner General of the Uganda Revenue Authority (URA), John Rujoki Musinguzi, has announced plans to appeal a High Court ruling that mandates the tax authority to refund $45 million (Shs166 billion) Heritage Oil and Gas Limited.

The Commercial Division of the High Court ruled that URA had erroneously computed the Capital Gains Tax (CGT) on the 2010 sale of Heritage Oil’s assets to Tullow Oil, a deal worth over $1.5 billion.

The court found that URA failed to account for exploration costs incurred by Heritage, amounting to $150 million, in its CGT calculation.

This omission, according to the judgment, led to an inflated tax liability and overpayment by Heritage Oil.

The court’s decision has been hailed as a significant victory for the company, which had contested URA’s tax assessment for years, arguing that the sale was unfairly taxed.

In an exclusive interview with NBS TV, Musinguzi expressed dissatisfaction with the ruling, asserting that URA adhered to proper procedures in calculating the CGT.

“We believe that the ruling was not based on a fair interpretation of the law and the facts at hand,” said Musinguzi.

“Our position is that the costs associated with the sale of assets, including exploration costs, were adequately considered when calculating the tax obligations.”

Describing the decision as “unfair,” Musinguzi reiterated URA’s commitment to ensuring tax compliance while defending its methodology.

He noted that the tax authority would challenge the ruling in a higher court to seek a fair outcome.

The $45 million refund, to be paid with interest, represents a significant financial and reputational challenge for URA.

If upheld, the ruling could set a precedent for other companies disputing tax calculations and refund claims.

This case highlights the complexities of Uganda’s tax regime, particularly regarding high-value transactions in the oil and gas sector.