Article courtesy of OxfamAmerica<\/p>\n
Dr. Prosper Ngowi<\/strong><\/p>\n Dr. Prosper Ngowi, an economics professor from Tanzania, said that Tanzania has lost a lot of revenue from the gold sector because of its inability to monitor and collect taxes. \u201cAre we going to miss it this time around with gas? If so, we\u2019ll be the laughing stock of the world.\u201d Ngowi was part of a study by NORAD, the Norwegian donor agency, which identified \u201chuge gaps and huge needs for capacity building,\u201d in the gas sector.<\/p>\n \u201cThe Tanzanian Revenue Authority doesn\u2019t have capacity for extractive taxation generally but especially on oil and gas\u2026 While revenues will come seven to ten years from now, that\u2019s not so far away and it is good to put things in place very early. If we don\u2019t build the capacity to properly tax these resources all the revenues that should be used for pro-poor development would be a distant dream.\u201d<\/p>\n Adriano Nuvunga<\/strong><\/p>\n In Mozambique, world class gas discoveries have seen the \u201cgas sector growing fast but expectations are growing faster\u201d says Adriano Nuvunga of the Center for Public Integrity in Maputo.\u00a0 Even though the\u00a0big money\u00a0won\u2019t come in until the 2020s (some projections are for $200 billion to $400 billion) the discovery is a \u201cgame changer for a poor, aid -dependent country\u201d that carries high risks of corruption.<\/p>\n Mozambique announced last week that it had gained $227 million in capital gains tax in the transfer of just one gas block from one company to another and the Mozambique Tax Authority said it had collected $802 million from oil and gas companies since 2012.<\/p>\n Godber Tumushabe<\/strong>\u00a0<\/strong><\/p>\n In Uganda, the Uganda Revenue Authority is one of those \u201cinstitutions that you fear\u201d says Godber Tumushabe of the Advocates Coalition for Development and Environment (ACODE).<\/p>\n \u201cDonor commitment is commendable\u201d for supporting the institution, but it will be put to the test to develop new capacities in petroleum taxation. Uganda may receive more than $2 billion a year in oil revenues once production starts says Tumushabe, slightly more than half the size of Uganda\u2019s budget in 2012 and more than all donor aid.<\/p>\n The pending Public Finance Bill should include appropriate safeguards and transparency provisions. Tumushabe credits Tullow Oil\u2019s\u00a0disclosure\u00a0of the payments made to government, calling the move \u201cincredible.\u201d He says that Tullow\u2019s disclosures of tax payments \u201cpresents a challenge to Uganda to be more open.\u201d (Tullow\u2019s Chairman Simon Thompson told the conference Tullow will disclose payments down to the project level this year \u2013 in advance of new EU requirements.)<\/p>\n Charles Wanguhu<\/strong><\/p>\n Kenya\u2019s oil finds will \u201cchange\u00a0the face\u00a0of development in Kenya,\u201d says Charles Wanguhu of the Kenya Civil Society Platform on Oil and Gas. The Kenya Revenue Authority is one of the \u201cmore outstanding institutions,\u201d says Wanguhu, but it will certainly be challenged by the more than 40 different contractual arrangements in the oil sector in Kenya.<\/p>\n John Omiti of the Kenya Institute for Public Policy Research and Analysis (KIPPRA) says Kenya must have \u201cstrong institutions that will enforce the realization production sharing arrangements \u2026 that will be really essential.\u201d<\/p>\n Mohammed Amin Adam<\/strong>\u00a0<\/strong><\/p>\n Ghana is a relatively new producer of oil \u2013 starting in 2010 \u2013 and has so far not met the test in oil revenue collection, says Mohammed Amin Adam of the Africa Center for Energy Policy, an Oxfam partner. The country has collected more than $2 billion in oil revenues to date \u2013 fully disclosed under the country\u2019s landmark Petroleum Revenue Management Act \u2013 and the country is \u201cdetermined to avoid the curse that prevented many countries from transforming their resource wealth into tangible development outcomes.\u201d<\/p>\n Ghana\u2019s tax authorities, though, \u201cdon\u2019t have the capacity to hold companies to their tax obligations. Oil companies conduct self- assessment for the purpose of determining their tax liabilities and the government just accepts that,\u201d says Adam. The Ghana Revenue Authority lacks the ability to \u201cundertake cost audits of companies for tax purposes.\u201d (Under production sharing arrangements, higher declared production costs reduce government take in the form of \u201cprofit oil\u201d and other revenue streams.) Ghana\u2019s government needs to support capacity of GRA to undertake serious cost audits. In addition, Ghana is losing out on millions of dollars as its antiquated Petroleum Income Tax Law doesn\u2019t include capital gains tax.<\/p>\n To address weaknesses in tax collection and auditing some countries have outsourced some work to international audit firms. Angola, not seen as a paragon of good oil governance, has nonetheless effectively used international auditing firms such as KPMG to help in oil revenue collection. Donors have, of course, developed capacity building programs designed to help tax authorities deal with this complex sector (but low-paid civil servants may leave after training to join a big audit firm or oil company.) Another approach, introduced by Philip Daniel of the IMF at the conference last week, was to reduce demands on \u201cscarce capacity\u201d in governments such as through streamlining contractual arrangements to reduce administrative burdens.<\/p>\n This is not just a problem in Africa or other developing countries. In the United States and other developed countries agencies fail in their duties to taxpayers to collect extractive industry revenues and ensure a fair return. Lost revenues in Africa, though, could make a huge difference \u2013 think what $800 million could do to support farmers in Mozambique \u2013 and resource-rich African governments should not leave money on the table.<\/p>\n While obscure and unsexy, civil society, journalists, parliamentarians and others need to watchdog tax authorities to ensure they do their job well. Combining the \u201ctechnical and analytical sophistication\u201d among African civil society advocates called for by Tumushabe and the broad engagement of the citizenry and parliaments urged by Adam, an \u201cactive citizenship\u201d approach toward tax collectors can help ensure that Africa doesn\u2019t lose from the current oil boom.<\/p>\n","protected":false},"excerpt":{"rendered":"