Uganda’s Revenue body has defended its decision to reward civil servants with over Shs6 billion (£1.3m) for their work on a court case the Ugandan government won against UK firm Heritage Oil Company.
URA says the civil servants deserved an appreciation for the unprecedented win for the country and said this was “standard international best practice”.
The payout, which was code-named “a presidential handshake”, went to 42 officials for their role in a capital gains tax dispute, in which the government was awarded a total of $700m.
It was initiated by head of the tax collection body, Doris Akol, in a May 2015 letter to President Museveni.
The tax collection body says that the reward was less than 1% of the money won in the case, and all relevant approvals were sought before payments were made.
The list of civil servants who benefited, includes Ms Akol herself, her predecessor Allen Kagina who now runs the National Roads Authority, the former Attorney General, the former Secretary to the Treasury, and the head of Kampala Capital City Authority, Jennifer Musisi, who headed the tax body’s legal department at the time.
In 2010, Heritage Oil sold its interest in Uganda to Tullow Oil at over $1.5bn, and the Ugandan government decided to impose a capital gains tax on the sale. But the oil firms refused to pay and the drawn-out dispute went on to the UK court of arbitration, where it was concluded in 2015.
Local media have reported that the Secretary to the Treasury at the Ministry of Finance had reservations about the payout, but was told it could be post-audited.
The Auditor General told a parliamentary committee that the honorarium would be audited.