406
A. R. Tom
exceeding 85%, the Graben is highly prospective (Polus and Tycholiz
2016). However, challenges relating to the commercialization of the
onshore waxy petroleum remain significant. In light of this, the GOU
has over time offered a number of fiscal incentives to reduce the costs
imposed on the nascent developments.
13.2.3.2 Fiscal Incentives
VALUE-ADDED TAX (VAT)
Section 4 of the Value-Added Tax (Amendment) Act of 2015
exempted imported materials, equipment and services utilized in the
development phase of the petroleum sector. The VAT imposed would
have increased the upfront financial requirements without generating an
associated revenue stream for the IOCs. The delayed recoverability of
the expected refunds would have further hampered the project value by
imposing a cost akin to an implicit export tax (Boadway and Keen 2010).
13.3 Methodology—Evaluation of Economics
of Fiscal Terms and Alternative Regime
The economic terms for the current and future petroleum operations in
Uganda were evaluated within the licensed areas based on the proposed
development plans envisioned within the country. A robust economic
model reflected the fiscal terms for the EA1 2004, EA3A 2004 and EA1A
2012 to highlight the evolution and nature of the fiscal costs imposed.
A theoretical fiscal package was utilized to facilitate comparative analysis
and demonstrate the potential benefits of enhancement.
13.3.1 Geology and Operating Assumptions
13.3.1.1 Kingfisher and Kaiso—Tonya Developments
The Kingfisher development lies within EA3A block south of Lake
Albert. It possesses approximately 196 million barrels of recoverable oil
A. R. Tom
exceeding 85%, the Graben is highly prospective (Polus and Tycholiz
2016). However, challenges relating to the commercialization of the
onshore waxy petroleum remain significant. In light of this, the GOU
has over time offered a number of fiscal incentives to reduce the costs
imposed on the nascent developments.
13.2.3.2 Fiscal Incentives
VALUE-ADDED TAX (VAT)
Section 4 of the Value-Added Tax (Amendment) Act of 2015
exempted imported materials, equipment and services utilized in the
development phase of the petroleum sector. The VAT imposed would
have increased the upfront financial requirements without generating an
associated revenue stream for the IOCs. The delayed recoverability of
the expected refunds would have further hampered the project value by
imposing a cost akin to an implicit export tax (Boadway and Keen 2010).
13.3 Methodology—Evaluation of Economics
of Fiscal Terms and Alternative Regime
The economic terms for the current and future petroleum operations in
Uganda were evaluated within the licensed areas based on the proposed
development plans envisioned within the country. A robust economic
model reflected the fiscal terms for the EA1 2004, EA3A 2004 and EA1A
2012 to highlight the evolution and nature of the fiscal costs imposed.
A theoretical fiscal package was utilized to facilitate comparative analysis
and demonstrate the potential benefits of enhancement.
13.3.1 Geology and Operating Assumptions
13.3.1.1 Kingfisher and Kaiso—Tonya Developments
The Kingfisher development lies within EA3A block south of Lake
Albert. It possesses approximately 196 million barrels of recoverable oil