Business
Miners under declaring royalties to government
Publish Date: Jan 28, 2014
Miners under declaring royalties to government
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By Mary Karugaba

Mining companies in Uganda are cheating the Government out of a fortune by under declaring their royalties.


“They are taking advantage of the minerals ministry’s laxity at making independent verification of their returns,” the Auditor General said.

In a report that is under debate by the public accounts committee, the Auditor General noted that mining regulations require the commissioner for geological surveys and mines to assess the royalty payable basing on monthly returns submitted by the holder of the mining rights.

The commissioner is also supposed to use other information obtained from the field inspections, which in many cases does not happen.

Energy ministry officials led by the acting permanent secretary Eng. Paul Mubiru blamed shortage of funds for field visits to make independent assessments.

They said they have requested the finance ministry for sh1b from the non-tax revenue (NTR) collected in royalties to be able to do field visits.

“In order to address the weaknesses in the verification of revenues, management has requested to utilise a portion of NTR, which finance has accepted,” Mubiru said.

MP Paul Mwiru noted that recently the URA had to force a mining company to pay sh3b after under declaring its returns for many years.

He also expressed concern that the minerals ministry is under staffed and may not have capacity for independent assessment visits.

But MP Eddie Kwizera complained that since the discovery of oil, other sectors have been neglected.

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