Govt To Challenge Court Order On Gold Tax Exemption After MPs Query
Following pressure from the House, the Attorney General has revealed that government will challenge the interim orders exempting payment of taxes on gold exports.
Hon. Kiryowa Kiwanuka made the disclosure while responding to concerns raised by legislators on a waiver issued by the Ministry of Energy and Mineral Development that slashed taxes on gold to Shs43 billion from Shs616 billion.
In 2021, the Ministry of Finance, Planning and Economic Development issued a directive to halt the implementation of the five per cent levy (US$200) on each kilogramme of gold exported.
In March 2023, the Minister for Energy and Minerals Development, Hon. Ruth Nankabirwa, directed the Uganda Revenue Authority (URA) to halt the recovery of gold export taxes.
In his report on the performance of URA for the Financial Year 2021/2022, the Auditor General noted that URA failed to collect Shs340 billion in taxes from gold exports, which was estimated to be recovered after the five per cent levy was implemented.
The Attorney General, during the plenary sitting on Tuesday, 16 May 2023 chaired by Speaker Anita Among, replied to queries by the Leader of the Opposition, Hon. Mathias Mpuuga, on the steps taken to vacate the interim orders by the court, halting the payment of the taxes.
“We are appearing in court to pursue the Government position. An interim order does not take away the obligation but just stays it for that time. Any search in the laws of Uganda will not find an exemption to paying tax on gold,” said Kiryowa Kiwanuka.
He said gold exporters obtained the interim orders despite having agreed to terms contained in the Mining and Minerals Act, 2022 that require a percentage of tax to be paid on gold exports.
“Will the Attorney General tell us what is being done to resolve this matter, two years after the interim order was obtained? The statutory instrument under which these taxes should be paid expires in the next 30 days yet no steps are being taken to have the matter expended,” Mpuuga said.
Kiryowa Kiwanuka, however, said that tax collection is a matter of tax administration, adding that once a tax has been set in the law, an individual is required to pay it, adding that the statutory instrument for collection of taxes of gold was instituted after Parliament amended and passed the Mining and Minerals Act, 2022.
“Once the tax is in the law, it is payable and there are procedures to recover it. The recovery of this tax must be undertaken by the tax authority,” he added.
Mpuuga reiterated the need for the presence of the Minister for Energy and Mineral Development in the House, to present a report on the gold taxes.
“Government is struggling to raise revenue to finance the budget and is reluctant to collect taxes. The learned Attorney General speaking legalese does not help with the collection of these taxes on gold,” Mpuuga said.
He also put the Minister for Energy and Mineral Development on notice that he will present a report on the export of marble from Karamoja without paying taxes, which he said will require answers.