Overview and role of the EITI
Uganda was admitted as an EITI implementing country in August 2020.
The country has discovered commercially recoverable oil reserves, with current oil exploration work taking place in the Albertine Graben region. Uganda's proven crude oil reserves stand at 6.5 billion barrels with 1.4 billion barrels that are commercially recoverable. The country has a large artisanal and small-scale mining sector.
Uganda aims to use EITI membership to strengthen efforts in ensuring overall transparency in the sector, strengthen tax collection, promote public debate, improve the investment climate, build trust and create lasting value from petroleum and mineral resources.
To achieve these objectives, the Uganda EITI (UGEITI) work plan includes activities such as the development of a policy and plan on contract and license publication, the documentation of planned reforms on beneficial ownership transparency, a scoping study on state participation in the extractive sector and activities relating to communication and dissemination of data. It will further seek to enhance revenue management and accountability, for example through the publication of data on social and environmental expenditures, quasi-fiscal payments and the documentation of environmental impact.
Uganda is using the EITI to promote public debate on mining legislation reform, contract transparency, subnational revenue sharing and overall transparency in the extractive sector.
Uganda’s extractive sector is governed by the Mining Act, the Petroleum Act, the Public Finance Management Act and the Income Tax Act. The main taxes and fees imposed on extractive companies in Uganda are capital gains tax, profit tax and royalties. The Uganda Revenue Authority and Treasury are the main bodies responsible for collecting and managing taxes paid to the central government, while the Ministry of Energy and Mineral Development is responsible for sector-specific levies. Uganda has a Petroleum Fund that is managed by the Bank of Uganda in accordance with the Public Finance Management Act.
Mining licences are awarded on a “first in, first assessed” basis by the Ministry of Energy and Mineral Development. Petroleum exploration licences are granted through a competitive licencing process. While contracts are currently not publicly disclosed, the country has a public mining cadastre.
Uganda does not have a legal framework mandating the disclosure of beneficial ownership. A proposed Mining Bill has provisions for beneficial ownership disclosure, but this has yet to be legislated. Uganda plans to use the EITI to collect legal and beneficial ownership data in the absence of the legal framework for full disclosure, while advocating for the establishment of a beneficial ownership register.
According to the Public Finance Management Act, petroleum revenue is distributed between the central and local governments as follows:
- 94% to the central government;
- 6% to local governments that host petroleum exploration and production activities. Of this, 50% of revenue from royalties is distributed among the local governments based on the level of production of each local government or impact and 50% based on population size, geographical area and terrain.
Uganda EITI plans to increase transparency and public debate around local revenue allocation and management, particularly with respect to the revenue sharing formula.
UGEITI is administered by the Uganda Multi-Stakeholder Group (MSG). The MSG is hosted by the Ministry of Finance and chaired by Moses Kaggwa, Director of Economic Affairs in the Ministry of Finance, Planning and Economic Development.
Uganda’s first Validation is expected to commence in April 2023.