Government to Challenge Interim Orders Exempting Taxes on Gold Exports

The Attorney General has announced that the government will contest the interim orders that exempted the payment of taxes on gold exports in Courts of law.

This revelation came in response to concerns raised by legislators regarding a waiver issued by the Ministry of Energy and Mineral Development, significantly reducing taxes on gold from Shs616 billion to Shs43 billion.

In 2021, the Ministry of Finance, Planning, and Economic Development issued a directive to suspend the implementation of a five percent levy (US$200) on each kilogram of exported gold. In March 2023, the Minister for Energy and Minerals Development, Hon. Ruth Nankabirwa, instructed the Uganda Revenue Authority (URA) to cease the recovery of gold export taxes.

In the Auditor General’s report on the performance of URA for the Financial Year 2021/2022, it was noted that URA failed to collect Shs340 billion in taxes from gold exports, an amount that was expected to be recovered once the five percent levy was implemented.

During the plenary session on Tuesday, 16 May 2023, chaired by Speaker Anita Among, the Attorney General responded to queries from the Leader of the Opposition, Hon. Mathias Mpuuga, regarding the steps being taken to overturn the interim orders that halted tax payments.

“We are appearing in court to pursue the Government’s position. An interim order does not exempt the obligation but only stays it temporarily. There is no exemption to paying taxes on gold in the laws of Uganda,” stated Kiryowa Kiwanuka.

He further explained that gold exporters obtained the interim orders despite having agreed to the terms outlined in the Mining and Minerals Act, 2022, which require the payment of a percentage of tax on gold exports.

Mpuuga expressed concern over the delay in resolving this matter, two years after the interim orders were obtained. He noted that the statutory instrument governing the collection of gold taxes is set to expire in the next 30 days, yet no steps have been taken to extend it.

However, Kiryowa Kiwanuka emphasized that tax collection is a matter of tax administration and that once a tax is established by law, individuals are required to pay it. He added that the recovery of this tax is the responsibility of the tax authority.

Mpuuga reiterated the need for the Minister for Energy and Mineral Development to appear before the House and provide a report on gold taxes.

He expressed concern over the government’s struggle to generate revenue for budget financing while being reluctant to collect taxes. Mpuuga also warned that he would present a report on the export of marble from Karamoja without tax payments, demanding answers from the Minister.