By our reporter
The parliamentary probe committee Commissions, Statutory Authorities and State Enterprises (COSASE) that was constituted by parliament to investigate the UGX 6Billion golden handshake saga, chaired by Bugweri county mp Hon.Abdul katuntu on Wednesday released its damming report in which it recommends a refund of the said money by the beneficiaries!
The committee was investigating the award of UShs 6 Billion to 42 public officers for winning the London tax oil arbitration case between the Government of Uganda and Heritage Oil and Gas in 2015.
The committee therefore recommends as follows;
- That all funds paid out of URA account to the beneficiaries of the “handshake” should be refunded.
- The Attorney General should take immediate steps and measures to recover the costs amounting to USD 4,083,840 awarded by the International Arbitration Tribunal and report to Parliament within 90
(c) URA should take immediate steps and measures to recover the costs awarded by the TAT and High Court in application numbers 26 of 2010, 28 of 2010,6 of 2011,8 of 2011 and High Court Civil Appeal Civil Appeal No. 14 of 2011 as well costs in the High Court Appeal.
(d) The Auditor General should, as soon as possible, carry out a special audit into deductions of Withholding Tax on fees paid to the external lawyers; Curtis, Mallet-Prevost, Colt & Mosle LLP by URA and report to Parliament within 90 days.
The Committee observes therefore:
That it is true that USD 157 million, which would have accrued as part of the Capital Gains Tax, was waived.
The contention arose out of a clause in the PSA which provided for waiver of tax signed by the then minister Hon. Syda Bbumba.
That the dispute would not have arisen if the PSA did not have a waiver of
The then Minister of Energy, Hon. Syda Bburnba, did not have authority to waive tax in that transaction and her action of not having read the agreement before signing was irregular.
All the then Ministers of Energy who signed PSAs with a similar clause acted ultra vires the law.
The funds paid out were for activities budgeted for under the U 1<A
This ‘(handshake” expenditure was not a budgeted URA activity and therefore, a diversion of the UGX 6 Billion without lawful authority was contrary to the PFMA.
The payment of the UOX 6 Billion “handshake” from URA budgeted for activities without Board knowledge and/ or approval was in contravention of section 16 of the Uganda Revenue Authority Act, 1991.
The President’s approval of this “handshake” was bonafide. However, it was an error of judgment t.
The Committee concludes that the argument of the beneficiaries that the payment was rooted in Articles 98 and 99 of the Constitution was unfounded and misleading.
