Veteran journalist Andrew Mwenda was yesterday ambarrassed before the committee that is investigating the circumstances under which Shs6billion was paid to various government officials.
Mr Mwenda who applied to be a witness in the oil cash bonanza appeared alongside other members of the civil society including the Elders’ Council, civil society and the Uganda Law Society.
Mr Mwenda attempted to justify the cash bonus, saying that government has a practice of rewarding its officers but the veteran journalist could not mention a single policy justifying the same. This was after the committee chairman Mr Katuntu told him that the committee is only interested in policy and procedure, not practice.
Read the full interaction below:
Mwenda: I applied to come to this Committee because I was concerned that public debate is mixing two things; government policy to reward public officials for excellent performance and the procedure of executing such a gesture and if we don’t separate these two, we are likely to throw the baby with the bath water.
Mr Chairman I think it is absolutely important for government of Uganda to recognize excellence even in extraordinary terms whenever it is done.
Why I got interested in this matter, in 2012 Heritage wanted to sale its share to Tullow. Under the law to be able to sell, the oil company would require approval from the government of Uganda.
I want to report to this committee that in fact government of Uganda; whether it was ministry of energy, the ministry of finance and the Attorney General’s chambers were actually willing to approve the sale.
Allen Kagina intervened and said there is a tax to be paid and URA issued a tax assessment of 234 million US Dollars.
Many government officials said what URA is doing is going to reduce international investor confidence in Uganda. There was a lot of pressure to stop URA from collecting this money. URA held its ground.
Remember that no single African country in post-colonial Africa has ever collected capital gains tax from an international oil firm. This to me was an extraordinary demonstration of civic virtue.
If tax has been evaded and an official reports the evasion and that person recovers the tax, you normally get 10 percent. So if anybody at URA had kept quiet but gone to a third party and says you go and pretend to report to URA that there is tax available and if there is a dispute and government of Uganda wins you have 160 billion shillings because that is 10 percent of the 1.6 trillion shillings.
I am glad that officials at URA placed the interests of Uganda above their personal interests. If government of Uganda therefore rewards them whether with promotion, with standing ovation in Parliament or a cash bonus, we should see it as a right thing.
The process through which people were selected to be paid may be was neither fair nor comprehensive. Two, the selection of how much money was to be paid to each person was opaque, maybe next time there should be more transparency. I have read media reports that money was paid even before the Auditor General issued a warrant. Those were procedural mistakes.
In my own view, this money was not paid for extra work done, it was paid because of an extra-ordinary victory. This committee will do great justice to this country if they write a blue print for rewarding government officials. We should learn to reward public officials. This country is poor to afford decent wages, but we can create incentives for public officials who do extraordinary work.
We should look at these rewards as absolutely necessary to reward excellence
Katuntu: Mr Mwenda, is there a policy you know in this country by government of rewarding public officers?
Mwenda: I know of a practice…overall the government of Uganda in its rule number 7 of public sector ethics says that public officials can be rewarded with a promotion, a verbal recognition, a cash bonus with giving them responsibilities above their rank. At least I was told by the Attorney General that there is a law that allows government to reward public officials for exceptional performance.
Katuntu: I want evidence first, because the Attorney General is not here so we will not go into that. Do you know of any policy by URA for instance to reward their employees?
Mwenda: I am not so sure but if you ask me broadly about the government of Uganda, yes I know that the government of Uganda has a practice of rewarding public servants. When Uganda discovered oil I remember there was a prayer at Kololo airstrip where in fact government paid some cash bonus to Ministry of energy officials who were involved.
Katuntu: Is that government policy?
Mwenda: I said government practice.
Katuntu: Let us go by your own word policy; is there any policy you know where government rewards public officers the way it did in this case?
Mwenda: No.
Katuntu: This committee is actually interested in both policy and procedure because I am sure you know about public affairs more than many people, you can’t run away from procedure. Public matters are conducted according to procedure.
You said there is no country in Africa that has ever imposed capital gains tax. Is there evidence that the entire continent has got the same capital gains tax regime?
Mwenda: Mr Chairman what I know from experience is that no single country in Africa has collected capital gains tax from an international oil firm. Two, not a single country in Africa has won a tax dispute against an oil company.
Paul Etyang (Elders’ Forum): The matter of giving tax bonuses is not of Ugandan origin but even the colonial government had it. The issue that the Auditor General was involved. When it came to accountability, the bonuses would be spent under authorized constitutional bodies like the Auditor General. The Auditor General has to be involved.
Bernadatte Olowo (Elders’ forum) : The reward in itself is not wrong, but the manner in which it was given. These people wrote to the President requesting to be rewarded. They solicited for the reward. That means they weighed their work and then rewarded themselves. That is the crux of the matter.
I don’t see the difference between soliciting for billions of shillings to reward themselves and those who take people’s retirement benefits to reward themselves.
Justice James Ogoola: You should look at this very carefully; in terms of monetizing recognition or doing other things which are more enduring, more eternal than just money.
Rewarding someone who already has a reward of a salary, an allowance and so on and so forth…it begins to look a little awkward.
The reward policy system was always an extraordinary exercise to reward extraordinary work by extraordinary people during extraordinary circumstances.
Godber Tumushabe: The payment that was made out in terms of the 6 billion is related to two important documents; the Production Sharing Agreement between Tullow and government of Uganda but more importantly a memorandum of understanding between governments of Uganda, Tullow Uganda limited on the 15th of March 2011. The case of the payment of 6 billion and the secrecy with which it was made without any disclosure is related to the way that document is titled.
We believe that there is no government of Uganda document that should be marked private. We are requesting this committee to invite the people who signed on this document to appear before this committee to explain how private that deals with taxation is.
Francis Gimara, President Law Society: It is our opinion that looking at the facts…the only way the President could have exercised his function was if indeed he wanted to initiate any rewards to outstanding civil servants it should have been done either through the Appropriations Act or the Supplementary Appropriation s Act. It cannot be only on the basis of article 99.
If you are going to draw from the consolidated fund then an appropriation or supplementary appropriation act should be submitted.
