Kasaija, Nankabirwa summoned over Shs47b gold tax

Parliament has summoned Minister of Finance Matia Kasaija and his Energy counterpart Ruth Nankabirwa over their failure to make timely regulations on collections of gold tax, which saw the Government lose out revenue to the tune of Shs47Bn from gold exporters.

The summons were issued by COSASE following a concern raised by the Auditor General  in the December 2023 report, where Uganda Revenue Authority (URA) was faulted for failure to collect taxes on 70,837.91Kgs of gold exports valued at around Shs47Bn.

Record from URA indicate that gold exports in 2021/22 weighed 30,189.71Kgs while in 2022/23 the exports were 40,648.2Kgs, thus totaling to 70,837.91Kgs. According to the Mining and Minerals (Export levy and Refined Gold Regulations 2023, Section 3(ii) desires that US$200 be paid by the exporter on each kilogram of gold to URA, at the time the processed gold is exported. The regulations were meant to be valid from the 1st July 2021 to the 30th June and thereafter lapsed.

However, following the lapse of the regulations, URA had no legal instrument to rely on to continue collecting the gold tax, to which the Auditor General argued that the inability by the Authority to collect outstanding US$200 per Kgs of processed Gold exports from the concerned refineries deprived Government of revenue that could be used to finance other Government projects.

Abel Kagumire, Commissioner of Customs at URA told the Committee that at the URA had no law to impose the gold tax because the law enacted by Parliament didn’t specify what is processed gold and what isn’t processed gold. He added that despite the initial instrument expiring in June 2023, it wasn’t until recently on 14th May 2024 that URA was issued with another statutory instrument to resume collection of gold tax.

“We informed the Auditor that we didn’t have an enabling law at that time because the Mining and Minerals Act 2022 that imposed 10% levy on unprocessed minerals didn’t specify what is processed minerals and what is unprocessed minerals. So at that time, we were waiting for an enabling law to come into place and that is why the Commissioner General, wrote to the Minister of Finance who later wrote to the Minister of Energy and Mineral Development. We just got it on 14th May 2024, that is when we got the statutory instrument signed by the Minister,” explained Kagumire.

This prompted Medard Sseggona (Busiro East) to ask, “For how long have been these people exporting without paying taxes? We have been having a law which has been having gaps, where were you? Because we have had gold for as long as Uganda has existed, we have been mining for as long as I have lived. So we haven’t been collecting taxes on our minerals, the most precious gift we have from God, and other people go, mint money and they sell back to us, for them, they don’t pay taxes, where were you?”

John Musinguzi, Commissioner General, URA replied, “Our first correspondence on the matter was on 26th June 2023 and in this letter, we alerted the Minister of Finance that come 30th June, the current statutory instrument will expire and we sought her guidance on how to collect from 1st July, we didn’t get the response.”

Musinguzi’s response prompted Sssegona to ask why after receiving all these letters, the Ministry of Energy and Mineral Development kept quiet, prompting him to issue summons for the two Ministers to come and explain the mystery behind the gold tax debacle.