Parliament to investigate gold tax waivers

Parliament will start an inquiry into the circumstances under which the Minister of Energy and Mineral Development, waived taxes worth Shs616 billion on gold exports.

The decision to start the investigation followed a motion by the Leader of the Opposition, Hon. Mathias Mpuuga to institute a select committee to inquire into the matter.

Mpuuga’s motion emerged from the debate on the statement on taxes on gold exports presented by the Minister of Energy and Mineral development, Hon. Ruth Nankabirwa during the sitting of the House chaired by Deputy Speaker, Thomas Tayebwa on Tuesday, 25 April 2023.

Mpuuga proposed that once instituted, the Select Committee should investigate circumstances under which the statutory instrument was issued, consider agreements between Uganda Revenue Authority (URA) and gold exporters that were not tabled on the Floor of parliament and also considers matters attendant to the minerals industry.

Mpuuga said that the agreement between the gold exporters and the Uganda Revenue Authority was not been tabled in Parliament.
“Aware that the country is grappling with revenue challenges and now that we are in budget period, I beg that, with your indulgence and this rule, that this motion is taken and considered. I beg to move,” he said.

Hon. Nankabirwa said that the statutory instrument was to collect arrears of outstanding export levy on gold and not to write off gold tax arrears.
“It was recognized that there were already outstanding unpaid arrears from 01 July 2021 owed by gold refiners and exporters which they had already committed to pay under the indemnity agreements. Therefore, a statutory instrument was necessary to collect the arrears accumulated during the period,” she said.  
She said that this is when the minister duly made the Mining and Minerals (Export Levy on Refined Gold) Regulations, 2023 to collect the outstanding arrears from 01 July 2021 to 30 June 2023 and lapse thereafter.

Hon. Nankabirwa said that URA duly issued Demand Payment Notices to collect the levy but some gold refiners made a complaint against the same and filed a suit in court where an interim order has been issued.
“ln order to provide clarity and further engage the entire industry to enable seamless implementation, the minister wrote to the URA to request that implementation is halted until further guidance is provided,” she said.

During the debate, several Members of Parliament expressed shock over the manner in which gold refiners and exporters have been getting tax exemption based on a presidential directive.

Butambala County MP, Hon. Muwanga Kivumbi demanded that the minister before the House a copy of the presidential directive.
“Directives of the President are always in written form. Many times, when we are losing money, ministers come and say they were under instruction from the President. We would have expected you to lay on table that directive. This is connivance”, he added.

Erute County South MP, Hon. Jonathan Odur said that the powers to the minister are to make regulations on levies, fees and charges but does not provide for waive of tax arrears.

 “If you made any instrument on tax arrears then that instrument is defective from the onset and you exercised powers that you did not have. So, we cannot accept it as Parliament,” he said.

He added that the requirement for a statutory instrument is that it must come back to the House and be subjected to supervision.

“When this House gives you authority to make a statutory instrument, you come and lay it either for information, approval or ratification. You cannot make an instrument because it is only Parliament that has powers to make laws in this country”, he said.

Dokolo District Woman Representative, Hon. Cecilia Ogwal said it is the responsibility of the minister and the Attorney General to advise the President accordingly.

She called for to the cancellation of the statutory instrument so that the money already earned in post-dated cheques by the companies would be used for other purposes.