Uganda could be paying the price as a result of the secrecy that has shrouded its nascent oil industry. It has come to light that a cabinet minister granted a tax exemption to a British oil firm worth Shs571B without approval from cabinet.
This emerged this afternoon at a meeting held at State House Entebbe between MPs and lawmakers probing Shs6B doled out to government officials involved in a dispute between two foreign oil firms.
Highly placed sources revealed that the president admitted that there was a mistake and promised to refund the Shs6B.
In the same meeting it emerged that a cabinet minister illegally awarded a tax exemption of $157 million to a British oil firm, Tullow, when signing a production sharing agreement. The exemption is worth Shs571B, which is slightly higher than the internal affairs ministry budget at the time the country is grappling with a high crime rate.
Highly placed sources reveal the minister did not seek consent from the president or cabinet to endorse the exemption.
In the two hour long meeting that was closed to the media, President Yoweri Museveni admitted he made a mistake when he approved a Shs6 billion reward to officials involved in the arbitration dispute between Heritage and Tullow oil.
However, the president blamed former Attorney General Peter Nyombi for misleading him about the gift, which he believed was given within the confines of the law. In a show of remorse, Museveni offered to refund the 6bn shs to the coffers of URA where it was drawn.
However, sources reveal that the president plans to deduct the money from his donations budget. But this raised eyebrows because if its effected, it will appeared choreographed to placate the public that the money was refunded and yet it was picked from another vote.
Other sources revealed that the president asked the committee to hold responsible every official who flouted the payment guidelines including Nyombi and URA Commissioner Rose Akol for failing to consult the board before payment was done.
In 2015, Akol wrote a letter to the president following the conclusion of a tax arbitration settlement in London reminding him of the promise to reward officials involved in the case.