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Gold worth Shs11 trillion exported without permits

President Museveni inspects gold bars at one of the refineries recently. Any person wishing to export gold must first obtain an export permit from the Ministry of Energy. Photo / File 

What you need to know:

  • Whereas the Mining and Minerals Act, bans anyone from exporting minerals without a permit, gold worth $3.01b (Shs11 trillion) was exported in the 2023/24 financial year without permits

Auditor General Edward Akol has revealed that gold exports valued at $3.01b (Shs11 trillion) were exported in the 2023/24 financial year without the requisite export permits from the Minister of Energy. 

In details contained in the 2024 Annual Auditor General’s report, Mr Akol revealed that the exports were contrary to the Mining and Minerals Act, which prohibits any person from exporting minerals without a permit.

The Auditor General further noted that the unlawful exports had, therefore, led to loss of government revenue, with unpaid gold export levies accumulating to Shs68.84b, while at the same time government was unable to verify the origin and purity of the exported gold.

“In the 2023/24 [financial year], $3.01b in gold exports occurred without permits, preventing origin and purity verification ... resulting in Shs68.84b in cumulative unpaid export levies,” the report reads in part.

Data from Bank of Uganda indicates that during the 2023/24 financial year, Uganda exported 48,620 kilogrammes of gold, valued at Shs11.4 trillion.

The revelation by the Auditor General, therefore, means that 96.49 percent of the gold was exported during the period without permits.

Asked how this could have  happened, Energy State Minister Sidronius Opolot Okasai, yesterday said the permits had been issued retrospectively after government had lifted a suspension on gold exports, which had resulted from a tax dispute between exporters and government.  

In 2022, dealers suspended gold exports after government imposed a 1 percent levy on every kilogramme of gold. However, government later caved in to the demands of the exporters, and instead proposed a $200 charge per kilogramme, which was later endorsed under the amended Mining and Mineral (Export of Refined Gold) Regulations. 

However, Mr Okasai did not directly address the issue of how dealers were able to export gold without permits but said that the Ministry of Energy had signed a statutory instrument to enable URA to collect all unpaid levies on gold exported at the time when there were no regulations to implement the Mining and Minerals Act. 

Gold exports continue to be challenging in relation to meeting regulatory requirements. For instance, in November last year, Uganda Revenue Authority (URA) data indicated that large amounts of money in gold taxes remained unpaid months after dealers had exported the commodity, contravening the Mining and Mineral (Export of Refined Gold) Regulations, which require taxes to be paid at the time of export.

URA data indicated then that 90.26 percent of taxes that had been assessed on gold during the 2023/24 financial year, remained unpaid.

Data further indicated that whereas URA had assessed taxes on 46,263 kilogrammes worth Shs34.77b, only Shs3.39b, representing 9.74 percent, had been paid four months after the end of the 2023/24 financial year.

“4,484 kilogrammes were assessed and [Shs3.39b] paid in taxes. 41,779 kilogrammes were assessed and [Shs31.38b] is pending payment,” URA data indicated last year. 

Gold has in the last 10 years become Uganda’s largest revenue earner, contributing more than 44 percent of the country’s foreign exchange income.