Uganda Government on the spot over writing off Shs570b tax on gold exports

Parliament has given Finance Minister Matia Kasaijja up to Tuesday next week to explain why the Uganda Revenue Authority is not collecting tax on gold exports.

This came after the Chairperson of the Finance Committee of Parliament, Keefa Kiwanuka, revealed that Ministry of Finance has written off Shs573 billion taxes from gold exports for the financial years 2021/2022 and 2022/2023.

However, Kiwanuka said the move taken without the approval of Parliament is questionable and must be investigated.

Buhweju County Member of Parliament Francis Mwijukye suspected influence peddling in the write-off of the tax arrears, adding that well-placed Government officials are unlawfully transacting businesses with the Government for selfish gains.

Basil Bataringaya Rwankwene, the Kashari North Constituency Member of Parliament, said the Finance Minister, Matia Kasaijja could be liable for contravening the provision of the Public Finance Management Act, 2014.

The Deputy Speaker, Thomas Tayebwa, directed the Minister of Finance to present a report on the matter Tuesday next week

On 7 March this year, Ruth Nankabirwa, the Minister of Energy and Mineral Development wrote to URA asking it to suspend the retrieval of taxes on gold exports for the Financial Years in question.

Yet, on 21 February 2023, Nankabirwa signed the Mining and Minerals Regulations 2023 (Export Levy on Refined Gold). The Deputy Speaker, Thomas Tayebwa directed the Minister of Finance to present a report on the matter Tuesday next week.

The Auditor General’s report reveals that URA incurred a deficit of 340 billion shillings in tax arrears from gold exports in the Financial Year 2021/2022. The 340 billion shillings tax may be recovered as the new Mining and Mineral Act comes into effect. The law provides for a  $200 levy on each kilogram of all processed gold exported.

The levy would also be backed by the Mining and Minerals (Export Levy on Refined Gold) Regulations 2023 which were to work retrospectively, dating back to July 1, 2021, and continue in force up to the end of FY 2022/23.

Now, In June 2022, the Government announced that approximately 31 million metric tonnes of gold ore had been discovered in the country. This is expected to instigate a surge in investment in the sector as it may result in as much as 320,158 metric tonnes of refined gold, worth an estimated US$12.8 trillion.