Ugandan tax authorities are investigating Petronas subsidiary Engen Uganda for allegedly evading taxes totalling more than 10 billion Uganda Shillings (RM11.3 million), the East African nation’s media reported this week.
The Ugandan petroleum company was accused of defaulting on its tax obligations since 2004, a year after it was set up by Engen Petroleum Ltd (South Africa), which is part of the Fortune 500 national oil company.
“Engen Uganda Ltd has been paying management fees to Engen Petroleum Ltd (South Africa) on a quarterly basis and sometimes on a monthly basis, but not paying withholding tax on the payments,” a whistleblower said in a petition sent to the Uganda Revenue Authority (URA), as reported by Uganda news portal Chimpreports.
Petronas strategic communications department general manager Mohd Suhaimy Kamaruddin was unavailable for comment.
Chimpreports also reported that Engen Uganda had fallen behind on remitting social security contributions from employees to the Uganda National Social Security Fund.
URA officials could not deny or confirm the claims, Ugandan newspaper Daily Monitor reported last Monday.
Engen Uganda is also alleged to have declared losses since beginning operations in 2003, despite making profits.
“The company kept repatriating all profits in the form of intercompany payments (from Engen Uganda to Engen Petroleum Ltd). As such profits were transferred back to South Africa disguised as expenses and/or losses,” said the whistleblower, as quoted by Chimpreports.
Engen Uganda, which stopped operations last June, has reportedly been sold to Kenya oil company Addax.
Engen Petroleum Ltd is 80 per cent owned by Malaysia’s national oil company Petronas.
Eleven Engen Uganda employees have sued the firm for unlawful termination, Uganda’s Daily Monitor reported last June.
They had reportedly accused the oil company of slavery, breach of contract, statutory breach and illegal employment practices, including discriminatory treatment and violation of privacy and dignity.
Apart from South Africa, Petronas also has operations in the troubled South Sudan in the African continent.