Government through Ministry of Finance, Planning and Economic Development has proposed a new tax on each kilogram of gold exported.
The proposal is among the tax bills tabled last week by Minister of Finance Matia Kasaija in which Government is seeking to amend the Mining Act, 2003 to impose an export levy on processed gold and unprocessed minerals.The proposal, if adopted by Parliament, will see gold dealers part with USD200 (about Shs726,495).
In the proposed amendment, Government is seeking to insert a new clause in the Mining Act, 2003, by inserting a new clause to tax processed gold.
“There shall be charged a levy on processed gold at the rate of United States Dollars two hundred per kilogram which is exported out of Uganda,” the proposal says.
The levy shall be paid by the exporter to the Uganda Revenue Authority at the time the processed gold is exported out of Uganda.
Data from Bank of Uganda indicate that Uganda Gold exports brought in US$1.7bn (Shs6.175Trn) between December 2019 and November 2020.
Gold has in the last five years become of Uganda’s largest exports.
During the period, Uganda earned $509m (Shs1.8 trillion), representing a percentage contribution of 13 per cent to the country’s GDP.
Government is also seeking to impose a levy on unprocessed minerals and in this particular proposal, the exporter will be taxed 1% of the value of the unprocessed minerals which is exported out of Uganda.
The levy too shall be paid by the exporter to the Uganda Revenue Authority at the time when the unprocessed minerals is exported out of Uganda.
The development comes at the time when the February 2021 Auditor General’s report revealed that Government lost Shs8.3bn in undeclared minerals exported out of the country.
Auditor General John Muwanga upon reviewing, URA custom data discovered that 10,273 tonnes of exported vermiculite worth Shs8.3Bn were not declared to the Department of Geological Survey and Mining.
Vermiculite is well-known for being an effective growing medium (fertilizer) and it creates ideal conditions for plant growth by improving aeration of the soil, promotes a consistent release of added fertilizer and improves moisture retention of the soil.
In Uganda, the mineral is mined in Manafwa and Tororo districts in Eastern Uganda.
However, the Auditor General raised an alarm on other minerals like Tantalum and Tungsten worth Shs26.3bn that were exported out of the country without export permits as required by the law between 2017-2020.
