This was said by Mzumbe University Prof Honest Ngowi in an exclusive interview with ‘The Guardian’. He also pointed out that the oil and gas sector comes with it incalculably high risks.
Prof Ngowi said financial experts wading into the operational intricacies of the sector are currently facing many challenges including multiplicity of applicable laws and lack of experience related to oil and gas.
“The government should train tax officers to deal with gas auditing and in controlling revenues collected from gas resources,” he advised.
Specifically citing the mineral sector, he said the government established the mineral auditing agency to ensure that there was control of the revenue collected from the sector.
The don said since the oil and gas sector was still new in the country and therefore, there was the necessity for Tanzania Revenue Authority (TRA) staff to be more equipped so as to check tax evasions.
Unless the government effectively controls revenue collected from oil and gas, it will not be easy to register profit from the sector, he underscored.
On November 15 last year, the government was challenged to empower auditors with new auditing skills so that they could be able to efficiently carry out their duties in the oil and gas sector.
A senior lecturer at the University of Dar es Salaam (Business School), Dr Siasa Mzenzi, in a challenge to the second International Conference on Natural Resources Accounting and Finance (ICNRAF), with the theme: ‘Business and Management: Challenges and Opportunities in the Oil and Gas Industry in Emerging Economies”, said that most auditors had more legal expertise than auditing experience- hence it was important to build capacity for them.
“In order to cope with the complexities in the oil and gas sector, the tax collectors must be fully equipped with the necessary knowledge on various legal and regulatory framework monitoring oil and gas operations,” he said.
“In actual fact, auditing in oil and gas is risky since auditors have to spend more time in generating consensus. Our auditors lack the requisite competence and experience,” he elaborated.
According to him, the oil and gas sector has high detention risks since its operations are too technical.
Recommending the way forward, the Head of Accounting Department, University of Dar es salaam (UDSM), Dr Henry Chalu said building the capacity of local finance experts and auditors is of paramount importance in oil and gas transactions since it involves complex operations especially for upstream operations.
Basing on that fact, he said, local accountants with their current mediocre knowledge cannot effectively audit oil and gas firms without the advice from geologists.