Civil society organizations drilled holes in the 2021 Public Finance (Amendment) Bill, arguing that once enacted in its current form, it is likely to undermine the good progress the country has already made in the process. management of public funds.
In their joint press release, CSOs under their parent bodies – the Civil Society Coalition on Oil and Gas (CSCO) and the Civil Society Budget Advocacy Group (CSBAG) implored Members of Parliament to reject the bill, noting that when adopted, it risks undermining the original intention to pass the 2015 Public Financial Management Act
The 2021 Public Financial Management (Amendment) Bill was tabled in Parliament on September 27, 2021 by the Minister of Finance, Planning and Economic Development. The bill contains 4 clauses which, among other things, aim to allow the Uganda National Oil Company (UNOC) to retain a portion of the proceeds of the sale of oil from government state participation and financial obligations of the UNOC in the Tariff and Transport Agreement, the PSAs and the Joint Operating Agreements.
The government, to justify the amendment, argues that since all oil revenues are deposited in the Petroleum Fund (FP), there is no mechanism provided for ONUC to meet its financial obligations under contracts for difference. . The government further contends that the PFMA, 2015 in its current form does not provide for the payment of tariff obligations under the Host Government Agreement and the Tariff and Transportation Agreement before the net proceeds can. be deposited in the Petroleum Fund. Allowing ONUC to spend at source departs from government practice whereby ministries, agencies and departments collect revenues and pay them into the Consolidated Fund.
The bill also proposes to amend Article 3 of the 2015 Public Financial Management Law (PFMA) in order to review the definition of oil revenue. “Considering that the oil deals are treated with the utmost secrecy, we fear that it will be difficult for the parliamentary committees to determine the total amount coming from the interests of the State. the sale of oil (crude oil) will not be part of oil revenues, which limits Uganda’s prospects of maximizing revenues, ”the CSOs noted in a joint press release.
Spend at the source!
The bill proposes to amend Article 57 of the PFMA 2015 by introducing a new clause (5) (a), which gives UNOC the power to collect revenue and spend it at source without approval or appropriation. by Parliament. “We find this proposal irrational on the grounds that Uganda’s annual budget process is sufficient to meet the emerging financial needs of all government agencies and businesses like ONUC,” he said.
CSOs in the statement argue that there are already agencies like the Uganda Revenue Authority (URA) that can spend at source, to enable them to meet their urgent spending obligations, but with clear guidelines. “We advise Members of Parliament (Members of Parliament) to review Section 14 of the Ugandan Tax Administration Act, Cap196 (1991), which allows the URA to spend at source on the authorization of the Minister, an amount not exceeding that allocated by Parliament during a financial year. . If adopted, it can help ONUC to fulfill its obligations without any disruption, “the statement read in part. If adopted in its current form, the bill will give UNOC the authority to act. deposit the balance of the products retained after spending the funds for the purposes of paragraph 5 (a) in the Petroleum Fund.Under the bill, UNOC will submit a copy of the file to the Minister, Secretary of the Treasury, Accountant General and the Auditor General.