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Civil Society Statement on the leaked information on Corporations Dodging tax using deeply flawed Double Taxation Agreements

On Monday 4th April 2016, the world woke up to the shocking leak of confidential information by the “Panama Papers”[1] that, among other global scandals, revealed a paper trail of evidence showing how Heritage Oil and Gas Ltd attempted to avoid paying its tax liability in Uganda.

Members of Tax Justice Alliance Network Uganda would therefore recommend the following;

1)      Continue to freeze negotiations on all new tax treaties until there are clearer guidelines on how the country should benefit from such agreements.

2)      Cabinet needs to fast track the approval of guidelines for negotiating and entering into tax agreements.

3)      The Ministry of Finance should renotiate or revoke weak treaties, particularly on withholding tax and excessive tax deductions to prevent multinational companies from shifting their profits to tax havens. The most risky treaties in our analysis include the treaties with the Netherlands and Mauritius.

4)      Government should require all inwards investors to provide annual accounts based on country-by-country reporting requirements, which might reveal where profits shifting is taking place and trigger a tax audit.

5)      The government of Uganda should establish a mechanism for implementing the recommendations from the High level Mbeki Panel Report that was adopted by African Union in January 2015 to curb illicit financial flows.

6)      Government agencies particularly the Uganda Revenue Authority and the Uganda Investment Authority should strengthen their scrutiny of all MNC and foreign investments in Uganda to ensure they are not siphoning away would be tax revenues to tax havens.

7)      Financial Intelligency Authority which has mandate to deal with both financial elicit flows needs to be funded and supported to operate

8)      Leaders from African and other developing countries should push for the establishment of a UN global tax body where all countries would have equal say and decision making powers, unlike the OECD forum which currently dominates global tax rules.