Gold exporters now have to pay billions of shillings in arrears to the taxman
Uganda has taken extra precautionary steps to ensure the legitimacy of products entering its borders. Recently, the country issued a notice, to inform clearing officers of a new rule. Uganda Revenue Authority (URA) wrote to airlines operating in Uganda only to allow gold shipments with proof of clearance of all payments.
According to a report by the East African, Uganda Revenue Authority (URA) has written to airlines plying at Entebbe International Airport threatening to deny gold shipments if exporters do not present proof of payment clearance, stating that moving uncustomed gold violates East African Community Customs Management.
Following the report in December from John Muwanga, an auditor-general criticizing the taxman for neglecting to remit taxes on gold shipments of Ush340 billion ($89.3 million), the government has decided to put this measure in place.
Gold merchants made a lot of money from trading the highly sought-after resource.
“A total of Ush340 billion in taxes had not been collected from gold exports valued at Ush6.92 trillion ($1.8 billion) for the year under review. Management attributed non-collection to the minister’s statutory guidance staying the implementation of the one percent export levy,” Mr Muwanga wrote.
In response, the URA ascribes the fault for the meager collections to a tax dispute with gold exporters.
“The dispute started in April 2022 after the enactment of a law imposing a levy of five percent on every kilogram of refined gold and 10 percent on unprocessed gold for export. The tax had proposed a charge of $200 for every kilogram,” East Africa’s report read.
“Gold exporters and refiners termed the rates untenable, with both URA and the Uganda Free Zones Authority agreeing, warning they could lose business to neighboring countries that do not impose such a levy. The exporters in turn refused to make covert sales, resorting to smuggling,” the report adds.
For there to be a resurgence of gold exports, the URA followed legal direction by deferring the application of the one percent by Minister for Energy and Mineral Development Ruth Nankabirwa and suspending the export fee.
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