What you need to know:
The new proposal puts the tax at $100 for every kilogramme of refined gold instead of the 5 percent and 10 percent of the value of exported gold that had been imposed on refined and unrefined gold exports, respectively.
Government has given in to demands, reducing levy on gold exports that had been implemented in July last year.
Gold dealers had in the months from July suspended gold exports demanding that government reviews taxes that had been imposed on the commodity.
No gold exports have since been registered, with the impasse heavily eating into export volumes and earnings.
Gold had in the last two years, before the suspensions, been Uganda’s largest export, contributing at least 44 per cent of the country’s export volume.
Responding to inquiries in regard to progress of the review, Mr Moses Kaggwa, the Ministry of Finance acting director economic affairs, told Daily Monitor early this week that the proposed amendments had already been sent to Parliament for onward consideration.
The Mining and Mineral (Amendment) Bill 2021, he said, proposes a levy of $100 for each kilogramme of refined gold exports, which is a revision from the 5 percent and 10 percent that had been imposed on a kilogramme of refined and unrefined gold, respectively.
Earlier in April 2021, government had proposed a levy of $200 for every kilogramme of exported gold but the proposal was amended to 10 per cent and 5 percent for refined an unrefined gold exports, respectively.
Mr Kaggwa early this week told Daily Monitor that the Mining (Amendment) Bill is expected to be finalised at the committee level soon, before it is tabled for discussion in the Plenary.
“The Mining and Mineral (Amendment) Bill is before Parliament and has surpassed the 45 days it should be in the committee. We gave our proposals on how the Bill should solve the problem of levies that had been imposed,” he said, noting that the $100 levy will only apply to refined gold while there will be no export of unrefined gold.
In the August 2021 Ministry of Finance Economic Performance report, Finance Minister Matia Kasaija indicated that gold dealers had suspended export of the commodity due to tax related challenges.
Government, he said, had taken note of the concerns and had embarked on reviewing the problematic tax regime.
The impasse has seen Uganda experience a reduction in export receipts, which in December, according to Bank of Uganda had dropped to $324m (Shs1.1 trillion) from $455m (Shs1.6 trillion) in June.
Dr Adam Mugume, the Bank of Uganda director for research, in an earlier interview told Daily Monitor that receipts had been affected by the failure to register gold exports, noting that this had resulted from taxes that government had slapped on dealers.
Uganda has in the last five years seen a spike in gold exports, boosting export earnings over the period.
According to data from Bank of Uganda, before the standoff in July, gold was Uganda’s leading export commodity.
Gold trading in Uganda is highly secretive. Apart from export volumes, little is known about the origin of the commodity.
Unrefined gold imports from both Tanzania and Zimbabwe have pushed the two countries into becoming some of Uganda’s largest trade partners, according to data from Bank of Uganda.
For the first time in years, trade between Uganda, Tanzania and Zimbabwe has been standing out with Uganda’s imports from Tanzania doubling between April and June last year.
In June, Uganda imported goods worth $125.12m (Shs444b) from Tanzania, which indicated a 43 per cent increase from $70.07m recorded in the same month last year.