A cross section of Ugandans that Uganda Correspondent interviewed via email believe that President Museveni is right to insist that foreign oil explorers working in Uganda today should build a refinery in Uganda and pay taxes in Uganda because it will benefit Uganda.  The email survey was done after the Newvision newspaper reported in its 18^th June 2010 Issue that Heritage Oil and Gas Company Ltd, an oil exploration company working in Uganda, had failed to agree with the government of Uganda on the question of whether or not Heritage Oil is liable to pay Capital Gains Tax in Uganda when it sells its interests in Ugandan oil wells to a company with better capacity to refine oil within Uganda. 

It is believed that Heritage has intentions of selling its interests in oil blocks 1 and 3A to either Tullow Oil, or ENI Spa, an Italian oil company.  The estimate value of the deal is said to be in the region of $1.5b.   It is the tax on this proposed sale, otherwise known as Capital Gains Tax that has proved to be a major sticking point.  The government of Uganda seems to be totally unprepared to cede ground on its desire for a local oil refinery and its demand that Heritage Oil pays Capital Gains Tax of approximately 800billion shillings to Uganda Revenue Authority [URA] if and when it sells its interests to another company.  And it appears, a number of Ugandans whose sample views are presented here below agree with the government’s stance.

Caroline Namukasa, a resident of Kireka, agrees that President Museveni is right to insist that local oil production would create jobs, address shortage of petroleum products and lower the prices.  “Of course I agree with our president on this issue.  Making petrol in Uganda will reduce transport prices as well as prices in the shops”; she says.  For her, oil means petrol and nothing else.

John Okiror from Soroti on the other hand, seems to have a different reason for agreeing with president Museveni.  His eyes are firmly set on the possibility of employment for himself and many like him.  “I think it is a good thing.  Many of us are unemployed.  We need jobs.  May be we shall be employed by the petrol producing companies one day”.

Ignatius Muhumuza who describes himself as an IT Expert from Mbarara seems to have more xenophobic reasons for supporting the Uganda government stance.  “These bazungu came and stole from us when we were still their colony.  At the time, we had no power to stop them.  Now things are different.  They must play by our rules because we play by their rules when we visit Europe.  If they can’t accept it, we shall simply chase them out”.

John Bosco Ocan, a Ugandan from Gulu who now lives and works in Boston-USA, says:  “that is not even a question that should be up for debate.  The oil is ours and we decide how it is exploited, refined, and sold.  Here in the US, the tax that I pay to the US Treasury doesn’t even reach my account.  So what is Heritage talking about”.         

Finally, in the Newvision story, Uganda’s Energy Minister Hilary Onek is reported to have said that “…the oil fields are not in London”; where Heritage Oil wanted the tax dispute to be arbitrated.  He is then reported to have added that “…they are doing business here based on a national asset. They are obliged to pay the tax… if I were Heritage I would not go for arbitration. I would just pay my tax and get my super profit.  I don’t understand that greed”.

Before the disagreements over tax arose, heavy fuel oil and gas was expected to start flowing next year with petrol, diesel, paraffin, and aviation fuel coming a little later.  Now everything it seems, is hanging precariously on a tax shoestring.