Lazima ukubali kuliwa ili ule, hilo lipo tena kwa mataifa yote ya dunia, tatizo ni pale unaliwa hadi mifupa kama jinsi nyie huliwa kwenye shamba hilo la bibi. Nchi mna kila kitu madini zaidi ya mataifa yote Afrika, ardhi kubwa, vivutio bora zaidi ya mataifa bora Afrika, kwanza mpo nchi mbili ndani ya muungano yaani orodha ni ndefu ya kila sababu za nyie kuongoza Afrika kiuchumi na kila kitu, lakini mnatajwa kwenye orodha ya mataifa maskini wa kutupwa Afrika.
Leo hii baada ya zaidi ya miaka hamsini ya uhuru ndio mnagundua eti mnaliwa kwenye mchanga wa dhahabu, aisei tatizo lenu mna uzembe wa kusoma, hampendi kusoma kabisa hivyo inabidi mpigwe chenga kwenye mikataba, Kingereza huwa kinawapa chenga pia. Ukitaka Mtanzania atie saini chochote mpe mkataba ulioandkwa kwa kingereza chenye misamiati na maneno mengi, ataishia kuuliza wapi pa kutia saini, basi.
Mnafaa kwanza mnajifungia ndani na hiyo mikataba, mnasoma neno kwa neno, herufi kwa herufi kabla ya kutia saini. Bure mtaliwa hadi muikimbie nchi. Nyerere naskia alizuia madini yasiondoke hadi pale mtakua na elimu ya kutosha, sasa leo hii mnajinadi kuwa na elimu lakini mnaliwa balaa.
Millions feared lost in mining sector through lax regulations
MONDAY OCTOBER 31 2016
Kenya could be losing millions of shillings in revenue from the extractive sector, with companies left to voluntarily declare how much they produce since the authorities lack capacity to validate the figures.
According to the Auditor General’s report for the year to June 2015, regulatory lapses and poor monitoring gave two major mining firms, which export billions worth of minerals annually, the leeway to determine what royalties to pay without audits by the ministry of Mining.
Carbacid (CO2) Ltd — a leading producer of natural, food grade, compressed carbon dioxide — is said to have failed to file reports on its production.
The multinational, which paid the government Sh1.008 million in 2015, is said to have done so on its own volition without providing records of how much it extracted.
“Clause 10 of the signed mining licence requires Carbacid to file progress reports and sales returns which form the basis for royalty payments. Carbacid has to date not complied with the provision. Thus, it has not been possible to confirm the accuracy and completeness of the royalties received,” the auditor wrote.
The company, owned by Carbacid Investments Ltd and listed on the Nairobi Securities Exchange, made a profit before tax of Sh580 million in 2015 after a Sh186 million tax investment allowance on new investments that was made in 2014.
In another case, Base Titanium, which is among the biggest foreign firms in the mining sector, paid royalties amounting to Sh260.7 million in 2015 by declaring on its own will the amount of titanium exported, according to the auditor general.
The declarations were based on the quantities licensed by the Commissioner of Mines but no verification was made on the actual quantities of export.
Self-declared quantities
“The receipts are based on self-declared export quantities for which the Commissioner of Mines and Geology has issued export permits. There has been no evidence of subsequent verification of the actual exports vis-à-vis declared quantities to validate their accuracy. It is, therefore, not possible to confirm the completeness and validity of royalties’ income as reported,” the auditor wrote.
The Australian multinational — which controversially claimed Sh2 billion in Value Added Tax refunds from the government last year, sparking a backlash from then Mining Cabinet Secretary Najib Balala — said it had invested heavily in building its own port and ship loading facility.
The revelations now put the Mining ministry on the spot with regard to the system of tracking operators and the actual revenue due to the government. The ministry’s licence monitoring was also questioned as it potentially allows dealers to operate beyond what they are allowed to do.
“There has been no dealer premise visits conducted in the year under review to verify validity and compliance with the existing licence terms. Information available indicates that revenues totalling Sh820,000 in the form of dealer licence remained uncollected and undisclosed in the financial statements as of June 30, 2015,” noted the auditor.
The scenario paints the image of a wide revenue leakage which, if sealed, could have enabled Kenya to collect more than the Sh1.3 billion it did last year from dealer licences. The ministry, which the auditor general said had no records of its fixed assets, is also yet to map the minerals available in Kenya.
This means those involved in exploration have a free hand to identify locations and quantities of minerals available.Mining Cabinet Secretary Dan Kazungu, who recently revealed that Sh3 billion had been set aside to map mining resources, did not respond to enquiries by the Sunday Nation sent to him two weeks ago despite several reminders. Our questions were on the regulatory lapses and the timelines set, which have been pending since 2012.
Base Titanium, which confirmed it was still waiting for Sh1.7 billion relating to the construction in 2014, had reported paying Sh225 million in royalties, an amount the government in May 2015 disputed; recognising only Sh100 million received from the company, which was expected to have paid Sh400 million.
Base Titanium told the Sunday Nation it had complied with all requirements but at the same time blamed the ministry for failing to audit exports.
“Base Titanium complies with the full range of reporting requirements set out under its Special Mining Lease and the relevant laws and regulations.
“While the auditor general refers to lack of evidence of verification by the Ministry of Mining of Base Titanium’s exports, the company’s adherence to the regulatory requirements and its robust internal systems means the royalty payments accurately reflect the sales made in a given period. Every shipment is made under an export permit granted by the Ministry of Mining,” the firm wrote in response to our queries.
Base Titanium’s export data shows that it has sold titanium worth Sh29.4 billion since 2014.
Carbacid also denied the allegations on lack of records and possible revenue losses for Kenya. It said it plans to exist “for a very long time”.
“We are not aware of these allegations; all we know is that we have been complying,” the management said without giving further details.
The auditor general also faulted the issuance of export permits to mining companies as the licences are dished out irregularly with negative revenue consequences.
“Information available indicates that export permits with a value of $18,619,645 (approximately Sh1.9 billion) were issued during the year by an unauthorised officer whose employment contract expired on April 19, 2014.
This is contrary to the Mining Act which stipulates that export permits are to be signed by the Commissioner of Mines or an authorised officer whose authority has been delegated in writing. Consequently, the validity of the revenue collections on the export permits issued by the officer could be challenged,” the auditor wrote.
In many scenarios, multinationals are also accused of exaggerating expenditures on corporate social responsibility exercises and huge investment expenditures which inflate their costs and create tax reliefs.
Mining, which contributes a paltry 3.2 per cent of the country’s Gross Domestic Product, is said to be capable of generating up to 10 per cent by 2030, according to a recent mining forum in Nairobi.
Analysts believe Kenya risks losing more billions in the more complicated oil industry owing to such glaring loopholes.“We may as well be creating a huge avenue for scandals and massive losses if managing the simple extractive sector has become hard,” Nairobi-based analyst Robert Shaw told the Sunday Nation.
According to advocacy group Tax Justice Network Africa, a huge revenue lapse in the extractive sector is hurting the continent’s potential revenue growth, with various tax incentives given to multinationals to attract investments.
TJNA estimates that East Africa loses up to Sh200 billion a year by granting tax incentives to multinationals in the extractive sector. In a report released in June, TJNA and ActionAid asked the governments to review their tax incentives.
East African nations continue to lose huge amounts of revenue through unnecessary tax exemptions and incentives given to corporations,” reads the report.
Millions feared lost in mining sector through lax regulations