The Members of Parliament (MPs) on the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE) have questioned the government’s loss of about Ugx 47 billion of revenue on gold exports.
The committee led by Medard Sseggona, who also doubles as the MP for Busiro East, asked Sidronius Okaasai, the Minister of State for Energy, about the 11-month delay in enacting regulations to guide the collection of gold tax, whose lapse saw the government lose that much.
Sseggona asked Minister Okasaai to explain why it took the ministry 11 months to enact new regulations after the expiry of the earlier ones, yet both the URA and the Ministry of Finance wrote several letters requesting the ministry to expedite the enactment of the regulations.
“The reason we insisted on having the Minister of Energy is because, on the face of it, you caused us these losses. URA is crying out; 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.
“You are causing us a loss through guided flout because the exporters exploit your loopholes, and you know them. There is a possibility of a legal challenge because when you say people can export and then you give them a rate later, is there a provision in the constitution that you can tax without law? Without law, you can’t tax; that is why you aren’t taxing,” Sseggona added.
This followed a concern raised in the Energy Minister’s December 2023 report, where he faulted the Uganda Revenue Authority for the failure to collect taxes on 70,837.91 kg of gold exports valued at Ugx 47 billion, 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, defended himself before the MPs, saying that the Authority had no law to impose the gold tax since the law enacted by parliament didn’t specify what is processed gold and what isn’t, adding that despite the initial instrument expiring in June 2023, it wasn’t until May 14, 2024, that URA was issued with another statutory instrument to resume collection of gold tax.
In 2023, the government introduced a 5% export levy ($200 per kg) on refined gold and a 1% tax on unrefined gold exports through the Mining and Minerals Export Levy Regulations, which URA has been enforcing.
