HOOK OR CROOK! Gold tax must be paid, AG insists

The Attorney General, Kiwanuka Kiryowa has insisted that despite some gold exporters dragging the Government to court in protest of the gold tax, the exporters will have to pay the tax as paid by Parliament.

Kiwanuka’s remarks on Tuesday were in response to a concern raised by Leader of Opposition, Mathias Mpuuga who tasked the Attorney General to explain the steps he has taken to vacate the interim order the gold exporters obtained from court, halting payment of tax, saying the continued stay of the court directive is denying Government revenues.

Mpuuga said: “I am aware that the people objected to paying taxes even when they were committed, went to court and even got interim orders. Will the learned attorney general inform this house and the country the steps he has taken to vacate these interim orders? Or have the matter been resolved in one way or the other two months after the interim orders were given?”

The Leader of Opposition also alerted Parliament of the fact that the statutory instrument upon which we were meant to pay these taxes expires in the next 30days and no steps have been taken to have the taxes paid or have this matter resolved.

“These are the issues that make this house look flimsy for a serious house of parliament. An interim order doesn’t take away the tax obligation. It just stays that obligation at that time. So we are working on the case and we have to work within the schedule of the Government,” added Mpuuga.

However, the Attorney General replied arguing, “The issue of collection of taxes is a matter of administration of tax, the moment the tax is set a person who is obligated to pay that tax will be obligated to pay that tax. And even if this person defaults on paying this tax, there are procedures to be followed to repay the tax. I don’t think any member should be worried here, once the law is in place, the tax is payable.”

The development comes at the time Parliament recently tasked the Minister of Energy and Mineral Development, Ruth Nankabirwa to explain circumstances under which gold exporters were exempted from paying Shs573Bn of gold exports, despite Parliament passing the law to have the precious mineral taxed.

But during the discussion on the matter, the Opposition led by Muwanga Kivumbi (Butambala County) alleged that the initial tax that gold exporters were meant to pay was Shs616Bn and the Ministry of Energy went ahead and issued an instrument that reduced this tax to Shs43Bn, prompting MPs to call for investigation of officials in the Ministry of Energy.

The revelation prompted Deputy Speaker, Thomas Tayebwa to order Minister Nankabirwa to explain circumstances under which arrears reduced from Shs616Bn to around Shs432Bn arguing that the tax was based on the law, and it wasn’t based on the discretion, or the comfort of the officials at the Ministry of Energy and Mineral Development.

Explaining her role in the fiasco, Minister Nankabirwa informed Parliament that the implementation of the Mining (Amendment) Act,2021 faced resistance from the industry, specifically gold refiners and exporters who contended that the rates were untenable, and their stand was further enforced with Uganda Revenue Authority (URA) that also expressed concerns that the rates were too high and would be counterproductive by shifting processing and refining of gold to neighbouring countries that do not impose a levy.

The Minister revealed that as at 24^th December 2022, the total outstanding export levy charged at a rate of 5% was Shs538.062Bn.

The Mining and Minerals Act 2022 was enacted that repealed the Mining Act 2021 which also provided for Export levy on Gold Exports of 5% on each kilogram of processed gold and 10% on unprocessed gold, and the same law gave the Minister of Energy and Minerals development to issue statutory instruments, which led to the revision of the law to US$200 tax levy on each kilogram of gold.

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