Petroleum Fund collections drop

Friday March 20 2020
fin002 pix

Second time: Twice government has been withdrawing money from the Petroleum Fund to fund activities outside the oil industry. FILE PHOTO

Revenue collections for the Petroleum Fund reduced for the period ended June 30, 2019, according to the Fund’s annual report.
The collections reduced from Shs62.9b as of June 30, 2018 to Shs56.74b, mainly because of foreign exchange losses, according to the annual report released early this month.
In the period under review, the report also notes, government withdrew at least Shs159.3b from the Fund to fund unspecified budget support for the 2018/19 financial year.

The Fund is a depository for all petroleum related revenues under the Ministry of Finance.
According to the report, Finance Minister Matia Kasaija said the Fund’s value had as of June 2019 fallen to Shs311.1b.
The report highlights inflows, outflows and assets of the Fund.
The Fund, the report notes, had for the period fallen from Shs470.4b to 311.1b due to withdrawals of Shs148b and $13.95m from the Fund’s shilling and dollar account, respectively.

The money, Mr Kasaija noted, was transferred from the Fund for the 2018/19 financial year budget support.
This is the second time money has been withdrawn from the Fund to fund activities outside the petroleum development.
Collections to the Fund are mainly received in dollar thus movement in the shilling impacts it.
The report also indicates that the Fund value of Shs311.1b is constituted by cash equivalents of $74.82m, Shs28.22b in Bank of Uganda and a receivable of unremitted tax revenue from Uganda Revenue Authority of Shs6.5b as of June 30, 2019.
Mr Kasaija also explained that the Fund has continued to maintain two separate accounts – shilling and dollar – with the dollar account in the Federal Reserve Bank of New York purposely meant to facilitate investments of dollar funds under the Petroleum Revenue Investment Reserve.

Collections in the period

Uganda Revenue Authority collects all petroleum revenues, which is thereafter remitted to the Petroleum Fund Account.
During the period ended June 30, 2019, according to the report, URA collected petroleum-related taxes worth Shs51.06b of which Shs6.74b was Income Tax while Shs1.02b was value added tax.

Additionally, Shs43.41b was Withholding Tax. However, Shs6.45b, according to the report, was yet to be remitted to the Fund by close of June 30, 2019 and were only recorded as receivables for the reporting period.
The report also indicates that the Fund was credited with Shs5.68b, which was mainly generated from surface rentals, training fees, sale of data and business licence.

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In the report, Mr Kasaija also noted that government had established an Investment Advisory Committee to, among others, advise the Minister on how to invest funds under the Petroleum Revenue Investment Reserve.

moketch@ug.nationmedia.com

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