Monday, January 16, 2017


The sh6b cash pay out to officials key to the winning a favourable result in a multi-million dollar tax dispute against oil company Heritage Oil refuses to go away.

In 2010 when Heritage sold its interest to in their western Uganda oil concession Uganda Revenue Authority (URA) argued they were liable to capital gains tax. Heritage didn’t think they owed Uganda anything and even bolted the country after payment before URA could catch up with them. URA however were not about to let the issue of upto $700m go begging so proceeded to pursue them to the courts up to a London arbitration court.

A settlement netted the country $473m a princely sum for our cash starved coffures. In appreciation of the core teams efforts President Yoweri Museveni authorised a bonus pay out.

This week parliament went into indefinite recess following a ruling by the court of appeal whose import was to bar them from debating the bonus pay out.

The bonus pay out has got the chattering masses to a running start in the New Year.

Whereas the dust is far from settling two lessons are hard to miss from this unfortunate scenario (whichever way you look at it).

"To begin with as a country, as citizens we need to push relentlessly for the building of institutions and formalisation of systems. Emerging out of the chaos of the 1970s and 1980s it was okay to apply discretion in many affairs of state...

But two things have happened that are changing and will change the way we behave around public resources. One, as we broadened the tax base, we have also increased the number of people we are accountable to for how the money is spent. There will never be agreement in how best to utilise our finite resources. Hence the need for rules and procedures that are faceless, objective and transparent and backed by a reasonable consensus to govern our behaviour.

And secondly there is the increasing connectivity of our people ad proliferation of social media. As an example this we knew about the changes in the UPDF on Monday night. By the time the army came out with official communication on Tuesday morning we had thrashed out the issues of who, what, where, why and how. And by the time the daily newspapers came out on Wednesday they were looking decidedly dated. This speed of information transmission gives greater credence to the saying that “The lie will be half around the world , while the truth is still tying its shoelaces”

The second lesson is that in a country like ours where corruption is so pervasive, good people can suffer the perception that they have crossed to the dark side, if only because our default judgement on any action is that somebody must be “eating”.

"This is dangerous because among other things, it lowers the general level of trust in a society, making it that much more difficult to carry out normal transactions... 
 In a world where communication is flying faster and faster decisions will have to made with increasing speed and determinations about the trust worthiness of this or that individual or institution will be made that much more quicker.

A reputation built over decades can be left in smouldering ashes just by a shift in public perception. And in the court of public opinion perception beats fact every time.



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