Kampala, Uganda | THE INDEPENDENT | Local leaders in Luweero district are worried of a likely drop in local revenue collection after sand and stones were declared minerals by Ministry of Energy and Mineral Development.
Government approved a new mining policy, placing sand, murram, granites and stones under the mineral sector.
The Mining and Mineral policy 2018 was intended to promote regulation of substances excluded from word mineral in article 244 of the Constitution, promote use of technology with least impact to environment, licensing and revenue generation in mining sector among others.
However, the local leaders in Luweero say the Mining and mineral policy 2018 has adverse impact on local revenue collection.
Hussein Kato the Secretary for Luweero district explains that before the policy, the district through the licensing act used to collect administrative and license fees from companies engaged in stone quarrying and sand mining.
Kato explains that since this was placed under minerals, the mining act 2003 applies and licenses are now issued by the Commissioner, Mineral Development hence loss of local revenue.
Kato says that they were told to demand for royalties from Ministries of Energy and Finance but this may not fetch enough revenue because companies under declare returns while paying taxes in Central government.
Kato says they welcome regulation of sand mining and stone quarrying but issuing licenses should be left to local governments.
In the work plan, Luweero district expects to collect 462 million shillings from local revenue in financial year 2018/19.
Ronald Ndawula the LC 5 Chairman of Luweero district says that the local revenue may not be collected because Central Government has a record of not returning 25% taxes collected by local governments or compensating them in case of abolition of revenue sources as stipulated in the law.
Ndawula explains that the districts collect PAYE, VAT and withholding taxes on behalf of central government but agency fees are not disbursed to them.
He is sceptical the royalties will be disbursed, which could lead to drop of local revenue since sand mining and stone quarrying were among key revenue sources.
There are over 10 companies engaged in stone and sand quarrying in Luweero among them are Bangcheng Investments Limited, African Asia Company Limited, Dott Services and Xing Tong Limited among others.
Recently LC 3 Chairpersons led by Imarach Pascal protested a move by Luweero district to stop collecting the license fees after approval of the mining and mineral policy.
Imarachi said that the company trucks damage roads and they need to charge the companies to repair them.
The residents are also bitter that the stone quarrying has led to air and noise pollution.
Engineer Irene Muloni the Minister of Energy and Mineral Development could not be reached for comment on issues raised by local leaders.
Apart from stopping collection of license fees from stone quarries, revenue collection in Luweero is severely hampered by weak controls and corruption.