The Ugandan government has lost 47 billion shillings due to uncollected taxes on gold exports, according to a recent report. The report, issued in December 2023, criticized the Uganda Revenue Authority (URA) for failing to collect taxes on 70,837.91 kilograms of gold exports, as required by a law imposing a levy of $200 per kilogram of processed gold.
Records from the URA show that in the fiscal year 2021/22, gold exports weighed 30,189.71 kilograms, while in 2022/23, the exports increased to 40,648.2 kilograms, totaling 70,837.91 kilograms. This significant volume of gold exports went untaxed due to the absence of updated regulations.
Members of Parliament on the Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE) recently questioned the Minister of State for Energy, Sidronius Okaasai, about the 11-month delay in enacting new regulations to guide gold tax collection. This delay resulted in the government losing substantial revenue.
Abel Kagumire, the Commissioner of Customs at URA, explained to MPs on June 25, 2024, that after the initial regulatory instrument expired in June 2023, URA had no legal basis to impose the gold tax. The law passed by Parliament did not clearly define what constituted processed gold. Although a new statutory instrument was issued on May 14, 2024, allowing URA to resume tax collection, the gap in regulations led to significant financial losses.
Medard Sseggona, the MP for Busiro East, pressed Minister Okaasai to explain why it took the Ministry of Energy 11 months to enact new regulations. Sseggona highlighted that both URA and the Ministry of Finance had sent multiple letters urging the Ministry of Energy to expedite the process.
“Why did it take so long to issue new regulations?” Sseggona asked. “URA is unable to collect this revenue because you haven’t done your job. This delay has caused significant losses. Exporters are exploiting these loopholes. You can’t tax without a law, and that’s why we aren’t collecting these taxes.”
The Mining and Minerals (Export Levy and Refined Gold Regulations 2023) stipulate that a $200 levy be paid to URA for each kilogram of processed gold exported. These regulations were valid from July 1, 2021, to June 30, 2023, but their lapse left URA without the legal framework to continue tax collection. The Auditor General’s report emphasized that URA’s inability to collect the outstanding $200 per kilogram of processed gold exports deprived the government of revenue that could have funded other projects.
