Balancing of stakeholder interests through fiscal regime design: an analysis of the process and evolution of the law governing the taxation of Uganda's natural resource sector

Kirunda, Robert

Balancing of stakeholder interests through fiscal regime design: an analysis of the process and evolution of the law governing the taxation of Uganda's natural resource sector

Thesis / Dissertation

2026

Publisher

University of Cape Town

Department

Department of Commercial Law

Faculty

Faculty of Law

Abstract

Tax law in general relies heavily on economic theory. More specifically, taxation of natural resource revenue relies on peculiar considerations that account for the unique nature of the natural resource sector. As a result, scholars argue that natural resources should have their own unique tax design. However, this uniqueness results in well-articulated abiding tensions between various competing interests. Although several scholars posit the need to balance these stakeholder interests, they do not propose how to achieve this broad goal. The ownership, exploitation, and, consequently, taxation of natural resources also calls into debate the broader attendant themes of history, politics and strategic choices. Attracting and managing investor interests necessitates designing a fiscal regime that is both appealing and practical. This, in turn, requires that the country considers the uniqueness of the sector, without trading off its entitlements. Beyond the economic foundations of taxation, a holistic fiscal regime design process for the natural resource sector ought to embody these broader themes. Such a process provides a means through which Uganda can pursue that elusive balance of stakeholder interests. This study investigates how Uganda can best improve the process of reforming its natural resources fiscal regime and design to ensure that the regime maximizes resource revenue mobilization while balancing stakeholder interests. Anchored in the theory of critical legal studies and supplemented with traditional and contemporary economic and sustainable development theories, the inquiry relies on both doctrinal and empirical analyses. A rigorous doctrinal analysis finds that an investor-focused, profit-driven narrative dominates scholarship on resource revenue fiscal regime design. However, larger contextual, historical and political factors are just as important. By tracing the historical, political, and statutory journey of Uganda's fiscal regime, this study demonstrates that in a politically unstable environment, Uganda could not have adequately defined and pursued specific strategic choices. This facilitated the continuance of the extractivist approaches that first developed in Uganda during the colonial times when the country was not in control of its destiny, and did not raise significant resource revenue. Having overcome its political challenges, the country remains predominantly dependent on investors for capital into the natural resources sector. In addition to the doctrinal analysis, interview findings from key stakeholders reveal that Uganda's fiscal regime design has resulted from technical and political processes evolving side by side. These technical and political processes intersected a lot but led to different outcomes. The political processes articulated Uganda's clearest strategic choices so far. However, the outcome of the technical processes did not reflect those ambitions. The outcomes of these processes also reveal a divergence between the country's strategic ambitions and the ultimate resulting regime. These parallel technical and political processes reveal that investor interests and the need for foreign capital in the sector have the potential to significantly temper any political ambitions, however noble. Uganda has reformed both its taxation regime for both mining and minerals. Although the statutory reform of the mining regime followed a clear and detailed technical process, the political processes surrounding this reform exposed the prevalence of the two themes of presidentialism and ministerial overreach. On the other hand, the statutory reform process relating to taxation of petroleum was piecemeal, less transparent and more volatile. In both cases, the whole process through which Uganda enacted its reforms is not anchored in any statute and yet it should be. The study concludes that Uganda's current natural resource fiscal design does not reflect strategic choices that maximize resource revenue mobilization while balancing stakeholder interests. To remedy this situation, the study proposes five key interventions. First, Uganda should develop and improve its constitutional and legal framework to set defined inflexible mandates within which the respective government institutions design and enforce effective government policy with fiscal implications. These mandates will clarify the varying roles of each government institution and officer. Secondly, the country needs to define its strategic choices in a much clearer and more focused manner. Thirdly, the state will need to enact those fiscal mobilization pursuits and choices into legislation through a transparent, participatory and inclusive process, one in which each stakeholder is actively involved. Fourth, Uganda must shore up its own financial resources to invest in the natural resources sector. In so doing, Uganda will increase direct state participation and minimize reliance on foreign investment, particularly for the exploitation of strategic natural resources. Ultimately, however, Uganda must pursue strategies to strengthen judicial and administrative mechanisms and institutions. In doing so, Uganda must curtail the phenomena of presidentialism and ministerial overreach, to allow for the proper functioning of the institutional mechanisms that will bolster a robust, stable fiscal regime design for natural resources.

Keywords

tax law

Uganda

Reference:

Collections

PhD / Doctoral

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