Three gold refinery companies, namely Bullion Refinery, Aurnish Trading Ltd, and Metal Testing and Smelting Co Ltd, have been unsuccessful in their attempt to obtain a temporary injunction preventing the Uganda Revenue Authority (URA) from collecting taxes from them. The High Court in Kampala ruled that the main suit would ultimately determine the fate of these firms.
Registrar Kintu Simon Zirintusa, in a January 12 ruling, emphasized that URA has the capacity to refund any illegally collected taxes if the final decision in the main case supports it. The companies’ application was struck out, with the registrar stating, “…the second respondent (URA) has the capacity to refund any revenue erroneously collected. On the other hand, other gold refineries are paying the tax and granting the application would cause a grave inconvenience to the respondents (URA).”
Court records reveal that the three companies engage in the processing and exportation of imported gold. They argued that relevant sections of the East African Community Customs Management Act and the Protocol on the Establishment of the East African Community prohibit the payment of imported duties and taxes on goods brought into customs territory for processing and subsequent exportation.
The companies asserted that the retrospective imposition of an export levy is a legal challenge that the court must determine conclusively. The Attorney General countered by stating that the government introduced a Mining Amendment Bill in 2021, which established levy rates on the exportation of gold. After parliamentary disagreement, a 5 percent levy on processed gold and a 10 percent levy on unprocessed gold were imposed, giving URA the authority to collect taxes from July 1, 2021.
Following the enactment of statutory instrument no. 22 of 2023, URA sought to collect tax arrears and issued demand notices to the refineries. The Attorney General claimed the companies were aware of their tax liability but sought to break away from the association that insisted on paying the agreed arrears.
The date for the main suit’s hearing, filed by the three gold refinery companies, remains unclear as of now.
