A Select Committee of Parliament will soon be set up to investigate circumstances under which the Minister of Energy and Mineral Development, Ruth Nankabirwa waived off Shs616b of taxes arrears on gold exports early this year.
The House passed a motion moved by Leader of Opposition Mathias Mpuuga on Tuesday evening and Deputy Speaker Thomas Tayebwa has instructed the Whips of the five political parties represented in Parliament to name legislators to constitute the Select Committee.
Tayebwa put the motion to a vote by show of hands with 36 MPs supporting the constituting of the select Committee while 25 voted against the probe.
“We shall contact the whips to second members so that we can be able to look into this matter expeditiously” said Tayebwa after the motion was carried.
While moving the motion without notice as per Rule 59(k) of the Parliaments Rules of Procedure, Mpuuga said that the statement Presented by Minister Nankabirwa had a lot of misses than hits on her ministry’s decision to waive taxes for gold exporting companies.
“I beg to move to invite your indulgence and that of the House that this House considers a select Committee to investigate the circumstances under which a Minister issued a statutory instrument to waive Shs616b. This Committee should also consider matters attendant to this industry, aware that the country is grappling with revenue issues” Mpuuga said.
In the statement, Nankabirwa had informed Parliament that Statutory Instrument number 22 of 2023 was not to write off gold tax arrears but to collect arrears of outstanding export levies. MPs, however, accused the Minister of contradicting herself and violating the law as provided for in the Mining Act and Public Finance Management Act, when she revealed that there was a Cabinet decision and a Presidential directive on not levying taxes on gold exports.
“In March and April 2022, Cabinet considered the matter of export of minerals. It was agreed that the Country should encourage the grow of the gold industry in Uganda so that the country can earn more foreign exchange from the minerals and harness indirect benefits associated with gold refining activities” Nankdabirwa stated.
She added that; “accordingly, His Excellency the President directed the Minister of Finance not to levy a tax on the processing and export of gold, to enable the country maximise benefits from gold processing activities. This is the current position of the Government”.
Nankabirwa insisted that she much as Section 287 of the Mining and Minerals Act, 2022 gives the Minister mandate to make regulations for the purpose of giving effect to the provisions of the Act, with respect to fees, levies and charges payable for export of Minerals, there is no requirement that these regulations be presented to Parliament for ratification.
Butambala County MP Muhammad Muwanga Kivumbi then raised a red flag saying that the Statutory Instrument issued this year was “misleading” because there is no proof of a Presidential directive attached to it and the decision was also made retrospectively by going with a Cabinet decision of 2021 to implement the position of the law passed in 2022.
“What is at stake is even bigger than the Mabaati of Karamoja because we are talking about Shs616b worth of taxes that Minister waved by this statutory instrument. The Minister says in Paragraph 1.1 that the statutory instrument was intended on collecting arrears and not waving taxes. You issued an instrument that effectively writes off the tax” said Kivumbi.
Kivumbi who is also the Shadow Minister for Finance, argued Parliament to investigate the actions of Nankabirwa because she failed to lay on table the written Presidential directive that made her issue a statutory instrument to waive taxes on gold.
“The Minister comes to Parliament and says that this instrument will elapse on 30th June. This Minister needs to be investigated. In my humble view, this is connivance to deprive Ugandans of taxes worth Shs616b” he added.
Erute South MP Jonathan Odur also punched holes in the Minister’s statement saying that law only gives her powers to make regulations on the levies but not on the tax arrears by the mining and exporting companies.
He said that the Minister does not gave powers to issue statutory instruments without presenting them to Parliament for ratification.
“The powers we gave you are in the law enacted on 28th October 2022 and then you go back to exercise powers for an instrument dating back to July 2021. I would move that this House we nullify the instrument and we get the Shs616b and then we pay the intern Doctors and build good health centres” Odur charged.
Buhweju County MP Francis Mwijukye spoke in support of his two colleagues saying that gold mining areas in the country are wallowing in poverty because foreigners mine the gold and take away all the profits without even paying loyalties.
