Civil Society Organizations (CSOs) advocating for transparency in government expenditure have said that if the Government wants to address all weaknesses in the assessment and collection of royalties from the mining sector, they must recruit Mining Inspectors.
While addressing the media this morning at the Civil Society Budget Advocacy Group (CSBAG), Cissy Kagaba the Executive Office of Anti-Corruption Coalition Uganda (ACCU) said although Uganda is endowed with precious minerals, the country is not filling its the economic impact due to some weaknesses in the ministry of Energy and Mineral Development.
Quoting the Auditor General’s Report of the Financial Year 2018/2019, Kagaba said the Ministry only managed to collect Ush10.5Bn as royalties from the mining sector.
However, the report from the Customs and Excise Duty Department of Uganda Revenue Authority indicated that the Government should have collected UGx70.2Bn.
“The Government should come up with strong mechanisms to address such challenges in the mineral sector.
“if Uganda is to benefit from minerals like Gold, Tantalum and Tungsten, the greatest challenge that should be worked on is the issue of the ministry depending on monthly production declaration made by the Mining companies which are not independently verified,” said Kagaba.
Adding that “ because there are no permanent mining inspectors at the mining production sites to verify the production quantities being declared by the mining companies.”
To avert such a scenario Siraji Magara Luyima the Budget Policy Specialist at CSBAG advised Government to recruit mining inspectors to be deployed at all the mineral production sites.
“When the Government deploys Mining inspectors, it will be in a position to track the volumes of production per mine.
“This will help in calculating the correct amounts of money in the form of royalties to be paid by the mining companies to the Government of Uganda at the 5% rate charge.
“The absence of inspectors provides a great opportunity to the mining companies to under-declare the volume of minerals they have mined which affects government’s ability to raise domestic taxes,” said Luyima.
On the issue of unapproved budge expenditure, Julius Mukunda the Executive Director of CSBAG told the media that in the financial year 2018/2019 government spent over UGX1.2 trillion outside Parliamentary approval processes.
“We note with concern that in the that financial UGx615.7Bn out of a total of ugx1.8trillion supplementary budget requested by the Ministry of Finance was approved by Parliament. However the entire UGX1.8trillion was spent implying that UGX1.2trillion was spent outside parliamentary approval process,” said Mukunda.
Mukunda advised Government to ensure that the Minister of Finance adheres to the Public Finance and Management Act of 2015 which stipulates that all supplementary budgets should be approved by Parliament.
East African Business Week