Under
assessment of payment of royalties in the mining sub-sector has led to
loss of income, according to findings in the Auditor General Report.
According
to the 2018/19 Auditor General Report, the Ministry of Energy and
Mineral Development collected Shs10.5b in mining royalties out of a
possible Shs70.2b.
A review from Uganda Revenue
Authority indicates that the mining sub-sector can generate as much as
Shs70.2b at an applicable rate of 5 per cent especially from gold,
tantalum and tungsten.
Reacting to findings of the
Auditor General’s report, civil society organisations demanded that
government takes up appropriate action to close the loopholes.
“The
Ministry’s reliance on declarations from the mining companies in form
of monthly production returns, which are not independently verified is
part of the problem,” civil society organisations said in a joint
statement signed by Mr Julius Mukunda, CSBAG executive director and Ms
Cissy Kagaba, the Anti- Corruption Coalition Uganda executive director.
Most
mines in Uganda, the statement noted, lack regular inspection through
which production figures can be confirmed thus creating the risk of
under declaration of production.
“We therefore recommend that government addresses all the
weaknesses in the assessment and collection of royalties so that enough
revenues are generated from our mineral resources,” the statement said.
Civil
society also raised concerns on the lack of a guiding investment law
for the Petroleum Fund, which exposes the fund to abuse.
The
Petroleum Fund was established by Section 56 of the Public Finance and
Management Act and withdrawals are made through appropriation to either
the Uganda Consolidated Fund or Petroleum Revenue Investment Reserve.
However, there is no cap on what should be appropriated to either of the two.
The
Auditor General’s report discloses that there is lack of an approved
petroleum revenue investment policy, which delays appropriation of funds
for investment.
“In the natural resources sub-sector,
a fiscal rule on government spending is very necessary. It helps to
commit government to stable macroeconomic policy, which is necessary for
growing and diversifying an economy dependent on large, finite and
volatile natural resource revenues,” Mr Mukunda said.
iladu@ug.nationmedia.com
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