Parliament's Committee of Commissions, Statutory Authorities & State Enterprises (COSASE) is set to engage with officials from the Uganda Revenue Authority (URA) and the Minister of Energy & Minerals Development today. The discussion will center on the ongoing dispute regarding the collection of taxes on gold exports.
Back in May 2023, the Attorney General informed Parliament that the government had decided to contest interim orders that exempted gold exports from taxation. Kiryowa Kiwanuka, the Attorney General, was addressing concerns from legislators about a decision by the energy ministry that significantly reduced taxes on gold. The tax reduction was from Shs616 billion to Shs43 billion, sparking significant debate.
In 2021, the finance ministry had issued a directive to suspend the implementation of a five percent levy on gold exports, which equates to $200 per kilogram. This suspension was echoed by the energy minister, Ruth Nankabirwa, in March 2023, who instructed the URA to stop collecting taxes on gold exports.
The Auditor General's report on the URA's performance for the Financial Year 2021/2022 highlighted that URA failed to collect Shs340 billion in taxes from gold exports. This amount was projected to be collected following the implementation of the five percent levy.
The scheduled meeting aims to address the complexities surrounding these tax exemptions and directives, as well as the financial implications of the uncollected taxes. COSASE's involvement underscores the critical nature of this issue, reflecting the significant revenue loss and the need for clear policies on gold export taxation.
Legislators are particularly concerned about the rationale behind the energy ministry’s waiver and its impact on the country's revenue. The dramatic reduction in tax from Shs616 billion to Shs43 billion has raised questions about the decision-making processes and the influence of various stakeholders in the gold industry.
The government’s challenge to the interim orders exempting tax payment on gold exports indicates a push towards re-establishing a firm tax regime. This move is seen as a necessary step to ensure that the country does not lose out on vital revenue from one of its key exports.
During the discussions, COSASE is expected to seek detailed explanations from the URA and the Ministry of Energy & Minerals Development on the measures being taken to resolve this impasse. The goal is to establish a balanced approach that secures the nation’s interests while fostering a conducive environment for the gold export sector.
The outcome of this meeting could set a precedent for how tax policies are managed in the future, particularly in sectors with substantial economic impact. The engagement with COSASE is a crucial step in addressing the underlying issues and finding a sustainable solution to the taxation of gold exports in Uganda.
