Government has concluded drafting three different pieces of legislation that will inform how money from the Petroleum Fund in Bank of Uganda will be spent, writes JUSTUS LYATUU.
The policies, which are expected to follow the guidelines set out in the Public Finance Management Act (PFMA) of 2015, will spell out the finer details on how monies will move from the fund to selected areas.
"To facilitate investment under the Petroleum Revenue Investment Reserve in line with PFMA 2015, the ministry has finalized the draft Petroleum Revenue Investment Policy, the operational Management Agreement and Terms of reference of the Investment Advisory Committee," a recent report on the semi-annual inflows, outflows and assets of the Petroleum Fund, says.
The Petroleum Fund was created under the Public Finance Management Act of 2015. The Act requires all petroleum revenues, which accrue to Government, to be paid into the Petroleum Fund. It added that the minister of finance shall be responsible for the overall management of the Petroleum Fund and shall oversee the transfer into and the disbursements from the Petroleum Fund.
According to the recent ministry report, the fund was worth Shs 288.7 billion as at December 31, 2018, down from the Shs 470.4 billion that was reported six months earlier. The report explains that the drop in the value is down to a withdrawal of Shs 288.7 billion that was transferred to the Consolidated Fund to finance the Financial Year 2018/2019 national budget.
The PFMA allows for a transfer to the Consolidated Fund, but it does not support the idea of using the Petroleum Fund to finance the budget without specifically mentioning the area of investment. The PFMA 2015 largely specified that the money from the fund would be spent on mainly infrastructure.
The report also pointed out that the Uganda Revenue Authority is mandated to collect all the petroleum revenues that would be remitted to the fund. In the six months to December 2018, URA collected petroleum-related taxes worth Shs 30.3 billion. However, the ministry report noted that URA had not remitted Shs 2.5 billion by the close of the reporting period.
The PFMA 2015 requires that the petroleum revenue assessed as due each month, shall be paid by the seventh day of the following month by the person obliged to make the payment. It adds that "Where a person does not make a payment by the date specified in subsection, the person shall pay as a penalty, a surcharge of seven percent of the amount in default for each day of default."