The Commissioner General of Uganda Revenue Authority (URA), John Musinguzi (pictured) has revealed that as per March 2023, only Shs3bn has been collected from gold exporters in Uganda.
This is after another group dragged Government to court in protest of the requirement to pay the tax arrears before the regulation on this tax came into effect.
Musinguzi’s remarks were in response to the question raised by Paul Omara (Otuke County) who wondered if the Authority has started implementing the gold tax and collection of arrears and whether the tax has been included in the revenue target in the Authority’s 2023/2024 ministerial policy statement.
Omara said, “From effective July 2021 they should pay you the money, there is nothing like running to the President, they must pay taxes. We want the Ministry of Energy to give us the quantum of gold exported and URA, the Shs3bn is a drop in the ocean; we need to get the full amount. Going forward, there shouldn’t be playing games, if they want to exit, they have been blackmailing us that they want to go to another country, they should go.”
In response, Musinguzi said, “I would like to confirm that on the 4th of March 2023, the Minister of Energy and Mineral Development passed the statutory instrument that passed the rate of US$200 per kilogram of exported gold and we have since collected over Shs3Bn on hold that has been exported since that day. There is some contention on the appeals and arrears but I would also like to confirm that some of the companies have started paying the arrears, others have gone to court appealing over the payment of arrears.”
The Minister of State for Finance (General Duties) Henry Musasizi assured the Finance Committee that all the taxes which the law requires URA to collect shall be collected.
It should be recalled that in March 2023, the Minister of Energy and Mineral Development, Ruth Nankabirwa signed the
Mining and Minerals Export Levy on Refined Gold Regulations 2023, thus giving URA the green light to start the implementation of the golf tax almost two years after the tax was passed into law by Parliament.
It should be recalled that in April 2021, Parliament imposed a 5% levy on each kilogram of refined gold and a 10% levy on each kilogram of unrefined gold exported out of Uganda.
The Ministry of Finance had initially proposed to Parliament amend the Mining Act, 2003 to impose a USD200 export levy per kilogram on processed gold and unprocessed minerals, however, this was rejected by MPs who said the charge would be hard to implement and instead, Parliament approved 5% for processed and 10% unprocessed gold exports.
The latest signing into the new regulations comes at the time Auditor General, John Muwanga in his December 2022 report queried the failure by URA to collect gold tax to a tune of Shs340Bn from gold exporters, despite the players in the industry reaping Shs.29Trn from the precious mineral.
The report highlighted, “A total of Shs340Bn in taxes had not been collected from Gold exports valued at Shs6.92Trn for the year under review Management attributed non collection to the Minister’s statutory guidance of staying the implementation of the 5% export levy.”
Following the passing into law the gold tax Levy, Uganda witnessed a sharp decline in gold exports, with statistics from Bank of Uganda on the composition of exports values and volumes indicating that gold exports declined to just US$200.64M about Shs740.835Bn in 2022, up from US$1.819Bn equivalent to Shs6. 717Trn of gold exports in 2020 before the levy was imposed.
