Heritage Oil and Gas Limited v Uganda Revenue Authority
High Court, Not given in the report. 23 December 2024.
The cost of finding oil
When an oil explorer sold its Ugandan interests, were exploration costs part of the cost base for capital gains?
The situation
The Revenue Authority's capital gains assessment on an explorer's 2010 sale of assets left about USD 150 million of exploration costs out of the cost base, overstating the gain.
How it was resolved
As reported, the High Court held exploration costs are integral to the cost base and corrected the computation, ordering a refund of about USD 45 million, with interest. The report is an opinion piece and its interest figures are inconsistent; it says URA is likely to appeal, and does not confirm that an appeal was filed.
What a practitioner takes from it
Fourteen years from transaction to judgment, with interest running: the cost of delay falls on the public purse when the authority loses.
What could change
Faster resolution of high-value disputes, through dedicated case management, would limit the interest that accrues on both sides.