13 A Critical Intertemporal Analysis of Uganda’s Fiscal Regime …
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critically assess the fiscal elements prevalent in light of the investment
incentives provided. The chapter seeks to answer the following questions
from the Government perspective;
• What has been the nature of Uganda’s Fiscal regime over time?
• What are the project characteristics and cost structure of the current
projects within the country?
• What is the break-even prices of the Uganda Projects, and how do the
fiscal regimes impact them?
• What would be the investor response to the current fiscal regimes
and how can Uganda amend its fiscal regime in order to optimize its
project portfolio?
The chapter presents a theoretical fiscal regime with progressive features
to reduce the fiscal burden on marginal fields and provide more responsiveness of the Government revenue to project profitability regardless of
the level of production. This is particularly applicable to fields similar to
Jobi-East and Mpyo which were downgraded from the initial estimated
recoverable reserves of 200 MMbbl to 11 MMbbl and 89 MMbbl to 12
MMbbl, respectively (Ward and Malov 2016).
Section 13.2 presents a review of the recent economic literature and
studies relating to fiscal regime design and evaluation. A background on
Uganda explicitly addressing the need to foster investment is additionally
presented in this section. The detailed methodology utilized within the
study is highlighted in Sect. 13.3. The qualitative and quantitative analysis of the Uganda Fiscal regime and the possible impact on the current
projects presented in Sects. 13.4 and 13.5 concludes.
13.2 Literature Review
13.2.1 What Is the Nature of the Fiscal Costs
Imposed by Regimes?
Natural resources such as petroleum generate economic rent because the
marginal revenue accrued from the resource exceeds the marginal cost
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critically assess the fiscal elements prevalent in light of the investment
incentives provided. The chapter seeks to answer the following questions
from the Government perspective;
• What has been the nature of Uganda’s Fiscal regime over time?
• What are the project characteristics and cost structure of the current
projects within the country?
• What is the break-even prices of the Uganda Projects, and how do the
fiscal regimes impact them?
• What would be the investor response to the current fiscal regimes
and how can Uganda amend its fiscal regime in order to optimize its
project portfolio?
The chapter presents a theoretical fiscal regime with progressive features
to reduce the fiscal burden on marginal fields and provide more responsiveness of the Government revenue to project profitability regardless of
the level of production. This is particularly applicable to fields similar to
Jobi-East and Mpyo which were downgraded from the initial estimated
recoverable reserves of 200 MMbbl to 11 MMbbl and 89 MMbbl to 12
MMbbl, respectively (Ward and Malov 2016).
Section 13.2 presents a review of the recent economic literature and
studies relating to fiscal regime design and evaluation. A background on
Uganda explicitly addressing the need to foster investment is additionally
presented in this section. The detailed methodology utilized within the
study is highlighted in Sect. 13.3. The qualitative and quantitative analysis of the Uganda Fiscal regime and the possible impact on the current
projects presented in Sects. 13.4 and 13.5 concludes.
13.2 Literature Review
13.2.1 What Is the Nature of the Fiscal Costs
Imposed by Regimes?
Natural resources such as petroleum generate economic rent because the
marginal revenue accrued from the resource exceeds the marginal cost