East
African Community (EAC) governments have been urged to streamline the
oil and gas taxation industry regimes to make the sector more attractive
to serious investors.
David
Tarimo, the director of PricewaterhouseCoopers, said though regional
governments are trying to improve their tax systems, there are still
instances where wrong taxes are levied on oil and gas industry
activities.
It
is, therefore, important to review the oil and gas industry tax regimes
so that stakeholders and investors are not ambushed with hitherto
unknown duties. This will attract more investors into the sector and
ensure maximum benefit, as well as make the sector competitive, Tarimo
said.
Tarimo was speaking at the ongoing 7th East African petroleum conference and exhibition in Kigali on Wednesday.
The
three-day meeting, organised by Rwanda’s ministries of East African
Community Affairs and Natural Resources, attracted about 500
participants, including oil and gas experts, and policy-makers.
Tarino
argued that when a country’s tax regime is not clear, it is hard to
attract firms with sufficient expertise and capital into the oil and gas
sector, or gain maximally from it.
Priva
Clemence, an energy expert in Tanzania’s Ministry of Energy and
Minerals, called for strong regulatory controls in petroleum
infrastructure development to ensure economic sustainability.
“One
of the fundamental requirements for realising the economic benefits
from the oil and gas industry is availability and access to
infrastructure. The development of such infrastructure should be guided
by clear and strong laws to ensure both investors and governments
benefit from the investment,” Clemence said.
According
to Ernest Rubondo, the acting director in Uganda’s directorate of
petroleum, there is need to, not only look at oil production, but also
value-addition, to be able to meet the growing consumption of petroleum
products in the region.
The region consumes over 250,000 barrels of oil per day, according to recent data.
This demand is expected to more than double in the next five years, hence the need for clear laws to spur the sector’s growth.
Evoda
Imena, Rwanda’s State Minister for Mining, said Rwanda is working on a
sector-friendly legal framework, which will also look into tax issues,
to attract more investments into the oil and gas industry exploration
and development activities.
He
revealed that government is currently evaluating applications for
exploration licences from international companies that have expressed
interest in the country’s oil and gas industry.
The
EAC bloc is on the verge of becoming an oil producer after huge amounts
of oil and gas have been confirmed in Tanzania, Uganda and Kenya.
Uganda
is moving into the production phase, while Tanzania has already started
gas production and Kenya is expected to start within the next three
years.
Source: New Times
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