Uganda's oil income spikes as it transitions to an oil producer

Uganda's oil income spikes as it transitions to an oil producer

As Uganda inches closer to becoming an oil-producing nation, activities related to the oil sector have begun to pick up steam. The taxation of oil and associated goods is one such activity. According to a recent report by Accountant General Lawrence Semakula, these levies have substantially contributed to the country's overall revenue.

As seen in the Ugandan newspaper, The Monitor, Uganda generated an additional Shs44 billion from oil tax revenues during the June 30, 2023 financial year.

This figure contained in the Petroleum Fund Report for the period relayed that Uganda made a total of Shs125.9 billion in oil tax revenues, during the period under review, a 54% increase from the previous year's Shs81.9 billion.

The report also revealed that tax revenue had the largest percentage of the entire revenue at 94% (Shs118.6 billion), while non-tax revenues came in at 6% (Shs7.4 billion).

Corporations and withholding taxes resulted from increased activity in the oil sector, following Uganda's push to fast-track its oil aspirations which in turn propelled the revenue generated from taxes. A final investment decision was announced in February 2022, while drilling of production wells followed in January 2023.

Subsequently, a rise in surface rentals and training fees financed by the Ugandan National Oil Company (UNOC), and DGR Energy Turaco, accounted for the non-tax revenues.

Furthermore, the report showed that Funds value had more than doubled from Shs121.1 billion to Shs246.6 billion in the period under review. The Petroleum Fund is running three accounts currently. Two of these accounts are with the Bank of Uganda and the third is with the Federal Reserve Bank of New York, which was opened on the 23rd of June, 2017.

The two accounts within the East African country are denominated in its local currency the Ugandan Shilling, while the account in New York is denominated in USD.


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