The UK Department for Business, Innovation and Skills has launched Extractives Industry Transparency Initiative (EITI) to improve revenue management and increase transparency in the oil and gas, and mining industry.
The initiative also aims to help people across the world share the economic benefits of the natural resources in their country.
Under the EITI initiative, companies operating in the UK will report the material payments they make to the UK government, while the government will in turn report the receipts it received.
The payments of tax, license fees and other receipts would be disclosed in reports conforming to the EITI standards.
UK has formed a stakeholder group, which has representatives from the CBI, Oil & Gas UK and civil society organizations to reach an agreement in implementing the measures.
UK Business Minister and UK EITI Champion Jo Swinson said if the revenues from the oil and gas and mining are managed well it will deliver economic benefits to the developing countries.
"Too often the assets from resource-rich countries in the developing world are not benefitting local people," Swinson added.
"This will result in greater transparency, help build a stronger economy and means that people around the world benefit fairly from the natural resources of the countries in which they live."
Oil & Gas UK economics and commercial director Mike Tholen said the country’s oil and gas industry pays billions of pounds annually in direct taxes on production.
"Oil & Gas UK will be co-ordinating engagement on the UK’s implementation of the Extractives Industry Transparency Initiative on behalf of the UK offshore oil and gas industry and will seek to ensure the benefits of EITI are achieved in the most cost effective way," Tholen added.