By Christine Nakyeyune
Over 40 oil marketing companies in Uganda through their umbrella body the Association of Oil Marketers (Uganda) Limited have petitioned the Minister of Finance, Planning and Economic Development to intervene in their tax dispute with the Uganda Revenue Authority (URA).
In their petition dated 24th January 2022 to Matia Kasaija, the oil companies say they are unsettled by recent letters from the URA demanding that they remit 15% withholding tax on all foreign transport payments they have incurred over the years in importing fuel into Uganda.
Denis Kakembo, Managing Partner at Cristal Advocates, the Law Firm representing the Oil Marketers Association says his clients are aggrieved that URA is taking a position that is against the advisory opinion of the Attorney General of Uganda who cautioned against such tax imposition.
He says this is likely to worsen the current fuel supply crisis blamed on bottlenecks arising from discontented transporters.
Kakembo warns that if URA is unrelenting that the fuel importers pay these foreign transporters less the 15% withholding tax, they are unlikely to provide the transportation services, potentially escalating the fuel shortages in the country.
Since 2019, the oil companies, some logistics firms and manufacturers have been feuding with the URA on this matter but it’s only this year that the URA has begun the widespread enforcement of this tax imposition.
“If the foreign transporters decline to receive their service payments less the 15% withholding tax, it is likely that the oil marketing companies in Uganda will shoulder the burden of this tax which will increase their transportation costs. Inevitably, this cost will be pushed down to the final consumer at the pump, in the form of increased fuel prices”, he said.