Why MPs want taxes on Uganda's refined gold exports increased

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Members of Parliament want the Government to sharply increase taxes on refined gold exports.

They say the tax framework should be urgently reviewed to ensure that Uganda earns commensurately from the resource.

These sentiments emerged during a Thursday (February 19) meeting of Parliament's Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) and officials from the Ministry of Energy and Mineral Development.

COSASE is chaired by outgoing Busiro East MP Medard Lubega Sseggona, while the ministry team was led by energy minister Ruth Nankabirwa.

At the heart of the interface, the lawmakers argued that the Government currently charges $200 (around sh710,000) per kilogramme of refined gold exported out of the country. And yet the same quantity reportedly fetches close to sh500 million when sold.

Elgon North MP Gerald Nangoli equated this to an unfair giveaway of a strategic national resource. 

Sections 127(b) and 130(b) of the Mineral Act, Cap 159, require mineral commodities to be exported or imported only at purity levels prescribed by regulations.

“If on coffee alone, a kilogramme fetches sh15,000 and is taxed sh2,500, how do you charge $200 on something that goes for $140,000," Nangoli posed, referring to gold.

Mpindi Bumaali (PWD representative for Central region said that if well harnessed, these funds could play a key part in offsetting many budgetary gaps that Uganda is currently grappling with.

"I want to challenge her [minister Nankabirwa] whether it would not be wise to advise the Ministry of Finance to tax more so that this country can realise more revenue, reduce the debt burden and also run the services,” weighed in Busongora South MP Gideon Mujungu.

According to the minority report on the 2026/27 Budget Framework Paper (BFP) which was recently approved, the Government in the next fiscal year plans to borrow over sh18.5 trillion from the domestic market (commercial banks) to finance the budget. 

Of this, sh8.9 trillion will be new borrowing to finance the budget, while sh9.6 trillion will be used to roll over maturing debt.

Amid this, COSASE committee chairperson Sseggona disclosed that the ministry is unable to capitalise the Uganda National Mining Company (UNMC) and get it off the ground.

UNMC is a state-owned limited liability company with two shareholders: the energy ministry holds 51 percent of the shares, and the finance ministry 41 percent.

The company is primed to increase investment, value addition and revenue generation among others.

"I know why you cannot afford [to capitalise UNMC]. [It's] because you charge $200 per kilogram of processed gold. Where is this money?” said Sseggona.

'We will look for the money'

In response, minister Nankabirwa promised to inject the necessary funds but emphasised that UNMC is still a young company going through its foundational processes.

“They just managed to complete a Mineral Production Sharing Agreement with the developer of Kilembe Mines. We will definitely look for money to capitalize this company, otherwise, we will defeat the purpose for which it was established,” she said.

The minister told the COSASE MPs that the process of finding an investor for Kilembe Mines in Kasese district took a considerable amount of time.

Beyond that, Nankabirwa pointed out that anonymous mining license holders pose another challenge as her ministry works to monitor the sector effectively.

While the energy ministry limits individuals to holding a maximum of five licenses, down from the 20 some used to hold years ago, Nankabirwa countered that identifying the directors still requires checking with the Uganda Registration Bureau (URSB) to know who is who.

“They change name. You know how people hide information. The big person I was referring to is the licensee who is not in Kassanda or Buhweju," she said. 

However, Nankabirwa clarified that it does not mean some people are untouchable. Rather, to avoid the full wrath of the law, she said, the culprits conceal their identities to prevent their licenses from being revoked for non-compliance.