Double Taxation Agreement Between Uganda And Netherlands

18. September 2021

The Uganda Revenue Authority estimates that between 2010 and 2017, the country lost at least SH$3 billion (Shs 11 trillion), or 16% of its total tax revenue, in terms of incentives and tax exemptions. Losses could recover if Uganda starts to engage in oil production, experts say. However, an Oxfam study describes that more than SH1 trillion of oil has been delivered due to adverse tax trends with the Netherlands, write Fredic Musisi &Ismail Musa Ladu. Kaggwa said the government was alive for the flaws in the DTAs and was determined to tackle them, but a balance had to be struck between what is good for the country and investors, who can always move their money elsewhere. [6] Renegotiations began in September 2019. Oxfam and its partners met with the Dutch delegation in Kampala. See uganda.oxfam.org/latest/blogs/role-strategic-partnerships-fight-. In 2019, Maurice Leaks drew attention to the role of the DBA between Uganda and Mauritius in facilitating tax evasion [2]. But the small island in the Indian Ocean is not the only culprit.

The Oxfam report also denounces the role of the Netherlands, a country that many in civil society consider a tax priority [3] in the global business scenario and as the leading investor in Uganda [4]. The Dutch Statistical Office, which has more than 14,000 shell companies, estimates that 80% of investment in the Netherlands immediately goes to other countries. The researchers estimated that 95% of Dutch investment in Uganda would actually come from a third country. [5] He added: „I have read the Oxfam report and I can say that the presumptions used are not correct; You claim to have a copy of our production release agreement, which is not correct. Anyway, my first point is that the Ugandan-Dutch agreement contains tax advantages that do not apply to other countries.“ In its report „The Money Pipeline“, Oxfam estimates that the country could lose up to $287 million in taxes on this project due to the unfavourable terms of the double taxation agreement (DBA) between Uganda and the Netherlands. This would actually represent 5.7% of all potential government revenue from oil exploitation – for 1 exploration area, only 4% of the country`s annual health budget. Following the tax experience of telecommunications company Zain International BV and independent Explorer Heritage Oil and Gas Ltd Company, when the two companies separately opposed the payment of capital gains tax (CGT) after the transfer of their stakes to other companies, the government announced in 2014 its intention to renegotiate all double taxation treaties/conventions (DBA/Ts). [2] Traditionally, developing countries close DTAs with prosperous countries as part of broader efforts to attract foreign investment and multinational enterprises to their countries. . .

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