East African Community (EAC) governments have been urged to streamline the oil and gas taxation industry regimes to make the sector more attractive to serious investors.

David Tarimo, the director of PricewaterhouseCoopers, said though regional governments are trying to improve their tax systems, there are still instances where wrong taxes are levied on oil and gas industry activities.

It is, therefore, important to review the oil and gas industry tax regimes so that stakeholders and investors are not ambushed with hitherto unknown duties. This will attract more investors into the sector and ensure maximum benefit, as well as make the sector competitive, Tarimo said.

Tarimo was speaking at the ongoing 7th East African petroleum conference and exhibition in Kigali on Wednesday.

The three-day meeting, organised by Rwanda’s ministries of East African Community Affairs and Natural Resources, attracted about 500 participants, including oil and gas experts, and policy-makers.

Tarino argued that when a country’s tax regime is not clear, it is hard to attract firms with sufficient expertise and capital into the oil and gas sector, or gain maximally from it.

Priva Clemence, an energy expert in Tanzania’s Ministry of Energy and Minerals, called for strong regulatory controls in petroleum infrastructure development to ensure economic sustainability.

"One of the fundamental requirements for realising the economic benefits from the oil and gas industry is availability and access to infrastructure. The development of such infrastructure should be guided by clear and strong laws to ensure both investors and governments benefit from the investment,” Clemence said.

According to Ernest Rubondo, the acting director in Uganda’s directorate of petroleum, there is need to, not only look at oil production, but also value-addition, to be able to meet the growing consumption of petroleum products in the region.

The region consumes over 250,000 barrels of oil per day, according to recent data.

This demand is expected to more than double in the next five years, hence the need for clear laws to spur the sector’s growth.

Evoda Imena, Rwanda’s State Minister for Mining, said Rwanda is working on a sector-friendly legal framework, which will also look into tax issues, to attract more investments into the oil and gas industry exploration and development activities.

He revealed that government is currently evaluating applications for exploration licences from international companies that have expressed interest in the country’s oil and gas industry.

The EAC bloc is on the verge of becoming an oil producer after huge amounts of oil and gas have been confirmed in Tanzania, Uganda and Kenya.

Uganda is moving into the production phase, while Tanzania has already started gas production and Kenya is expected to start within the next three years.

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