Ms Amina Abdalla, Natural Resources Committee chair. PHOTO | FILE
What you need to know:
House team calls for probe to establish discrepancy between ministry and Treasury records.
Parliament has called for an investigation to establish Kenya’s royalty and licence earnings from minerals after a discrepancy between the amount declared by the Ministry of Mining and the Treasury.
The National Assembly Natural Resources committee asked the Budget and Appropriations committee to ascertain the true amount given records from the ministry show that it collected Sh1.28 billion, twice the amount the Treasury says went into the State coffers.
This came after the Natural Resources Committee failed to get an explanation on the different figures as Kenya races to get a bigger share of earnings from its mining industry.
“The mining, royalties, fees and licences actual receipts for the year 2014/15 according to the Treasury is Sh647,781,613,” Ms Amina Abdalla, who chairs the committee said while presenting a final report on the Mining ministry budget for the 2016/17.
“However, the Ministry of Mining has recorded in its achievements raising revenue of Sh1.28 billion in the same financial year. We as a committee had serious challenges trying to ascertain the truth and reconcile the variance,” she added.
The earnings came in a year when Kenya increased royalties on minerals and scaled up titanium exports—which in 2014 became Kenya’s highest earning mineral as gold continued to lose its lustre with a sharp fall in sales for the precious metal that was top in 2012.
Kenya has proven deposits of titanium, gold and coal.
But the country’s mining industry is a relatively small contributor to national output although its revenues are expected to grow as new mines come onstream.
Last year the country earned Sh24.1 billion up from Sh21 billion in 2014 and Sh18 billion in 2011.
Following the earnings discrepancy, the Resources committee also wants a clear status report on whether the ministry is overstating its revenue collection or if there is revenue leakage at the National Treasury.
The Ministry of Mining last year attributed the increase in royalties to tighter licence requirements.
The royalties went up to 10 per cent of gross sales, from a previous three per cent. The affected minerals include titanium, rare earth and niobium.
In addition to royalty increases, the government revoked all mining licences issued in the months before and after March 2013 General Elections.
About 65 mining licensees were affected with the government saying they did not meet set standards.
Ms Amina Abdalla asked the Mutava Musyimi led- Budget and Appropriations Committee to probe the discrepancy.
“It is either the Ministry of Mining is overstating the amounts collected or the Treasury is not declaring the true amount of revenue,” she said.
Kipkelion East MP Joseph Limo who is a member of the Budget Committee said the huge difference in the declared amounts confirmed that the mining ministry was collecting revenue and spending at source.
“It appears that the ministry is collecting and spending money at source contrary to government financial regulations.”
“If the ministry remits the full amount of revenue raised from mining activities, then the Treasury is not recording and declaring proper receipts from minerals,” he said.
Ms Abdalla told Mr Musyimi to probe the collection and declaration of mineral royalties to enhance accountability.
“There is need to enhance accountability and transparency in the reporting of revenue collected by ministries and State agencies,” she said.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
