Gold revenue: Uganda lost Shs47Bn due to tax law loophole
COSASE noted that this lapse saw the government lose out about Shs47Bn of revenue. This followed a concern raised in his December 2023 report, which faulted Uganda Revenue Authority for the failure to collect taxes on 70,837.91Kgs of gold exports valued at Shs47Billion.
MPs on the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE), questioned Sidronius Okaasai the Minister of State for Energy, over the 11 months delay in enacting regulations to guide the collection of gold revenue.
COSASE noted that this lapse saw the government lose out about Shs47Bn of revenue. This followed a concern raised in his December 2023 report, which faulted Uganda Revenue Authority for the failure to collect taxes on 70,837.91Kgs of gold exports valued at Shs47Billion.
Such an amount in the gold revenue according to Busiro East MP, who is also the chairperson of COSASE, came up as per the law that imposed a levy of US$200 per kilogram of processed gold.
However, Abel Kagumire the Commissioner of Customs at URA told the MPs that following the lapse of regulations, 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.
He said, “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 revenue.”
On that note Sseggona (Busiro East) asked Minister Okasaai to explain why after the expiry of the earlier regulations, it took the Ministry 11months to enact new regulations.
He wondered why both URA and the Ministry of Finance wrote several letters requesting the Ministry of Energy to expedite the enactment of the regulations, but nothing was done to enforce collection of gold revenue.
“Why we insisted on having the Minister of Energy, is because on the face of it, you caused us these losses. URA is crying out that we can’t collect this money, because you haven’t done your work. Please tell us why it would take another Minister pleading with you to issue regulations that you are required to. It has an effect on your NTR,” he said.
He highlighted to the minister about causing the government a loss through guided flout, because the exporters exploit the ministry’s loopholes which he (Okasai) already knows that will deter proper collection of gold revenue.
According to Ssegona, there is a possibility of a legal challenge because one would wonder whether there is a provision in the constitution, that URA can tax without a law since the minister said people can export then are given rates later.
ICYMI: https://charmarnews.com/ministry-of-energy-quizzed-over-failure-to-collect-taxes-on-gold/
Gold exploration in Uganda
In July 2022, the Ugandan Government said exploration surveys in the country had revealed vast estimated gold deposits of around 31 million tones. Of the gigantic find, around 320,158 metric tons are refined gold, with an approximate gold revenue value of $12.8tn.
Uganda, which has emerged as a major hub of gold trade in the region, exported gold worth $2.3 billion in 2023, compared with $201 million over the previous twelve months, Bank of Uganda data showed.
ALSO READ: https://observer.ug/news/headlines/80255-what-awaits-uganda-s-mining-sector-in-2024
