By THE INDEPENDENT UG
Kampala, Uganda | THE INDEPENDENT | Uganda’s gold exports have experienced a remarkable rebound, reaching US$2.3 billion last year after the government implemented a decision to reduce export taxes. This move, aimed at revitalizing a sector that faced challenges for over a year, is evident in the Bank of Uganda’s latest data, showcasing a significant recovery from the US$300 million recorded in 2022 and signaling a return to growth.
In 2020, gold exports had reached US$1.8 billion, surpassing coffee as Uganda’s top export earner. However, these figures dipped in 2022 due to high taxation imposed in July 2021, leading to a year-long protest from processors and exporters. The government’s strategic tax adjustment in 2023, reducing the proposed levy from $200 per kilogram to a more manageable $100 or 5% of the value, has played a crucial role in this turnaround.
Traditionally known for its coffee exports, Uganda exported 38,878 tonnes of gold last year, a substantial increase from the 3,897 tonnes in 2022. This surge significantly contributed to the country’s total export volumes, reaching US$6.98 billion in 2023, up from US$4.2 billion in 2022.
Despite concerns raised by opposition legislators, particularly Ibrahim Ssemujju Nganda, the shadow minister of Finance, regarding the Uganda Revenue Authority’s (URA) failure to effectively collect taxes from refined gold exports, the sector continues to thrive. The MPs highlighted a substantial gap in the nation’s resource envelope due to uncollected taxes from gold exports, referencing data from the Auditor General. They argue that the proximity of individuals involved in gold exports to the president renders their businesses immune to typical URA enforcement actions.
In response, URA has written to airlines operating out of Uganda, urging them to reject gold shipments unless exporters provide proof of payment clearance. Failure to do so would violate the East African Community Customs Management. This action comes after the Auditor-General’s report criticized URA for failing to collect taxes from gold exports, while URA’s management blamed low collections on a tax dispute with gold exporters dating back to 2022.
Notably, representatives of three gold refineries and exporters – Bullion Refinery Ltd, Aurnish Trading Ltd, and Metal Testing Ltd – who previously contested URA’s tax claims in court, engaged in dialogue with the tax authority recently to outline a feasible payment plan.
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