{
  "title": "Uganda: Technical Assistance Report-Fiscal Regimes for Extractive Industries: Next Phase",
  "publication": "IMF Staff Country Reports, December 13, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2017/12/13/uganda-technical-assistance-report-fiscal-regimes-for-extractive-industries-next-phase-45462",
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  "summary": "This Technical Assistance Report discusses the advice provided by the IMF staff to the authorities of Uganda regarding extractive industry fiscal regimes.",
  "sections": [
    {
      "heading": "Executive summary and context",
      "content": "- Publication date: December 13, 2017\n- Report type: IMF Staff Country Report\n- Pages: 89\n- Series: Country Report No. 2017/367; Issue: 367; Volume: 2017\n- DOI: https://doi.org/10.5089/9781484332276.002\n- ISBN: 9781484332276\n- ISSN: 1934-7685\n- Core focus: fiscal regimes for extractive industries (oil and mining) and technical assistance provided by IMF staff to the authorities of Uganda."
    },
    {
      "heading": "Key findings and diagnostic observations",
      "content": "- As Uganda’s portfolio of projects diversifies in the oil sector, the minimum take could be adjusted to allow for possible bonus bids, and for higher shares in the most successful projects.\n- The royalty design needs to take account of new provisions for distribution of a portion to local governments.\n- The cost recovery limit could be set at 70 percent after deduction of royalty.\n- In licensing rounds, in addition to the work program, either a signature bonus or an upper tier of production sharing should form the bid variable, with all other items fixed and non-negotiable."
    },
    {
      "heading": "Policy recommendations and licensing design",
      "content": "- Adjust minimum take to:\n  - Allow for possible bonus bids.\n  - Permit higher government shares in the most successful projects through tiered arrangements.\n- Royalty framework:\n  - Incorporate provisions to ensure distribution of a portion of royalties to local governments.\n- Cost recovery:\n  - Set a cost recovery limit at 70 percent after deduction of royalty.\n- Licensing auction design:\n  - Make the work program a fixed element.\n  - Use either a signature bonus or an upper tier of production sharing as the bid variable.\n  - Keep all other contractual items fixed and non-negotiable to promote transparency and comparability across bids."
    },
    {
      "heading": "Analytical considerations and technical issues covered",
      "content": "- Tax and fiscal instruments considered: Income and capital gains taxes, withholding tax, customs duty, export duty, import duty, flat rate taxes.\n- Fiscal metrics and sensitivities: government share, sliding scale/production-sharing arrangements, rate of return considerations, cash flow and cost of capital impacts, sensitivity analysis for resource company outcomes.\n- Sectoral scope: Oil and Mining sector fiscal regimes and production sharing mechanics.\n- Governance and subnational distribution: implications of royalty distribution to local governments and related fiscal decentralization considerations."
    },
    {
      "heading": "Subject tags and keywords (as provided)",
      "content": "- Subjects: Commodities, Economic sectors, Expenditure, Income and capital gains taxes, Mining sector, Oil, Production sharing, Taxes\n- Keywords: Africa, cash flow, cost of capital, CR, customs duty, export duty, flat rate, Global, government share, import duty, Income and capital gains taxes, income tax, intangible asset, ISCR, Mining sector, Oil, Production sharing, rate of return, resource company, sensitivity analysis, sliding scale, tax treatment, West Africa, withholding tax\n\nInternational Monetary Fund. Fiscal Affairs Dept. \"Uganda: Technical Assistance Report-Fiscal Regimes for Extractive Industries: Next Phase\", IMF Staff Country Reports 2017, 367 (2017).\n\n---\n\n Content in this bundle\n\n- Country Report\n  - Country Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Country Report (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: December 13, 2017",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781484332276.002",
    "Publication date: December 13, 2017",
    "Report type: IMF Staff Country Report",
    "Pages: 89",
    "Series: Country Report No. 2017/367; Issue: 367; Volume: 2017",
    "DOI: https://doi.org/10.5089/9781484332276.002",
    "ISBN: 9781484332276",
    "ISSN: 1934-7685",
    "Core focus: fiscal regimes for extractive industries (oil and mining) and technical assistance provided by IMF staff to the authorities of Uganda.",
    "As Uganda’s portfolio of projects diversifies in the oil sector, the minimum take could be adjusted to allow for possible bonus bids, and for higher shares in the most successful projects.",
    "The royalty design needs to take account of new provisions for distribution of a portion to local governments.",
    "The cost recovery limit could be set at 70 percent after deduction of royalty.",
    "In licensing rounds, in addition to the work program, either a signature bonus or an upper tier of production sharing should form the bid variable, with all other items fixed and non-negotiable.",
    "Adjust minimum take to:",
    "Royalty framework:",
    "Cost recovery:",
    "Licensing auction design:",
    "Tax and fiscal instruments considered: Income and capital gains taxes, withholding tax, customs duty, export duty, import duty, flat rate taxes.",
    "Fiscal metrics and sensitivities: government share, sliding scale/production-sharing arrangements, rate of return considerations, cash flow and cost of capital impacts, sensitivity analysis for resource company outcomes.",
    "Sectoral scope: Oil and Mining sector fiscal regimes and production sharing mechanics.",
    "Governance and subnational distribution: implications of royalty distribution to local governments and related fiscal decentralization considerations.",
    "Subjects: Commodities, Economic sectors, Expenditure, Income and capital gains taxes, Mining sector, Oil, Production sharing, Taxes",
    "Keywords: Africa, cash flow, cost of capital, CR, customs duty, export duty, flat rate, Global, government share, import duty, Income and capital gains taxes, income tax, intangible asset, ISCR, Mining sector, Oil, Production sharing, rate of return, resource company, sensitivity analysis, sliding scale, tax treatment, West Africa, withholding tax",
    "**Country Report**"
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