Section 2: Insertion of section 89GDA in principal Act

The principal Act is amended by inserting immediately after section 89GD the following - "89GDA. Windfall tax. (1) Where the international oil price equals USD 75 (seventy five United States Dollars) per barrel or more on any day of a year of income, all licensees for Contract Area 1, Contract Area 3A and Licence Area 2 shall each pay a windfall tax on their net income generated from petroleum operations in relation to Contract Area 1, Contract Area 3A and Licence Area 2 after deduction of corporate income tax at a rate of 15%, computed as follows- Windfall tax = 15% * (A/B) * (C-D) where- A= _ the number of calendar days in the year of income on which the international oil price equals USD 75 per barrel or more; B= the total number of calendar days in the year of income; C= the net income generated from petroleum operations by the licensee in the year of income; and D= corporate income tax payable by the licensee for the year of income. (2) Where, for any calendar day there is no international oil price quotation, the oil price of the last quotation prior to the respective calendar day shall apply to that day. (3) The windfall tax shall be paid by the licensee on an annual basis, on the same date as the date of payment of corporate income tax due for the last quarter of the relevant year of income. (4) For the purposes of this section - (a) "international oil price" means the higher of either the simple arithmetical average of the per barrel selling prices of three globally recognised international crude oil benchmarks which are similar to the Lake Albert Crude, as agreed to between the Government of Uganda and the licensee, not later than sixty days prior to the commencement of commercial production or the Dated Brent; and (b) "net income" means the chargeable income of the licensee derived from petroleum operations in that year of income."