A panel of experts discussing UGEITi’s latest report on the extractive’s sector in Uganda.Uganda Revenue Authority (URA) officials are struggling to establish how much gold is produced in the country and where the gold exported by Ugandan refineries actually comes from, exposing gaps in the regulation of one of Uganda’s biggest export earners.Lawrence Muwonge, URA Manager in charge of Extractives, says the problem starts at mining sites, where much of Uganda’s gold is produced by artisanal miners who operate outside formal production and record-keeping systems.He says URA cannot establish with certainty how much gold an artisanal miner produces in a day, how much is sold, or who buys it.“Even just to know what he has sold in a day or what he has produced in a day, it is next to impossible,” Muwonge said.He said monitoring every mine would require URA officials to be present day and night, which is practically impossible.The problem does not end when the gold leaves the mine. According to Muwonge, refiners provide a more visible point in the supply chain because they operate from identifiable premises and their exports can be tracked. But determining where they obtain their gold remains difficult.“We can track their figures in exports. The Bank of Uganda can report them. But when it comes to a refiner telling you from whom they buy gold, it is next to impossible,” he said.Muwonge cited transactions that do not make commercial sense, where a refiner claims to have bought gold for $10 and sold it for the same $10, which he said cannot be viable after paying for labour, electricity and rent.The gaps described by Muwonge are reflected in Uganda’s latest Extractive Industries Transparency Initiative (EITI) report for FY 2023/24.The report shows that 20 extractive companies were included in the reconciliation exercise. Only 13 submitted reporting templates, while seven did not. The non-reporting companies accounted for Shs31.9 billion, or 3% of total extractive revenues covered.Corporate reporting quality was an even bigger concern. Only four of the 20 companies submitted signed templates. The 16 companies that did not submit signed templates accounted for Shs645.2 billion, representing 98.5% of the reconciliation scope. URA, the Directorate of Geological Survey and Mines (DGSM) and the Petroleum Authority of Uganda submitted signed templates.Gold is at the centre of the problem because of the scale of trade. The EITI report’s production and exports section shows substantial differences between quantities and values reported as imported and exported.For example, Thaba Investments reported imports of 12,377,803kg and exports of 12,657,815kg, while Simba Gold Refinery reported imports of 7,619,029kg against exports of 7,798,408kg. Metal Testing and Smelting reported 6,454,565kg of imports and 6,881,358kg of exports.Overall, the mining-sector table records exports valued at Shs11.816 trillion in 2023/24, compared to imports valued at Shs11.477 trillion.Discrepancies become more significant when government agencies’ gold figures are compared. URA records for 2023/24 showed about 46,263kg of gold exports valued at approximately $2.98 billion. Bank of Uganda records for the same period put exports at about 48,620kg, valued at about $3.09 billion – a difference of 2,357kg.Muwonge says the weakest link is the informal mining sector.“Artisanal mining has improved the livelihoods of so many communities, but when it comes to taxation, we have got so many problems,” he said.The problem is compounded by difficulties in establishing ownership. Muwonge said URA encountered mines that appeared to be Ugandan-owned but were operated by foreign nationals behind the scenes. In western Uganda, officials found more than 50 excavators and numerous Chinese expatriates at a site registered as a Ugandan company. In northern Uganda, they found over 60 Chinese nationals at a mining camp, yet the company had declared only three.Uganda Registration Services Bureau (URSB) officials say beneficial ownership disclosure is mandatory at registration to identify natural persons who ultimately control a company. But Muwonge says this does not resolve challenges on the ground.He said some operators become difficult to trace after URA assessments, with officials unable to establish whether they have left the country.The contradictions extend to policy. Muwonge noted an institutional clash where DGSM licenses a mining operator while another agency is expected to enforce restrictions on mineral exports.URA is also questioning the gold taxation regime. Muwonge said gold currently attracts no royalty under the regime he cited, while the export levy is fixed at $200 per kilogramme – a charge that does not rise with international prices, which he said had risen from about $45,000 to over $160,000 over the period cited.URA data previously showed billions of shillings in assessed gold export taxes remained unpaid. The Auditor General has also flagged gold exported without permits and unpaid levies.The broader challenge is data sharing. Muwonge said agencies have often worked in silos.“In the past, the actors in managing revenue collection in the mining sector, that is the ministry and URA, you find each of them wants to shine on their own,” he said.The Petroleum Authority of Uganda said stronger collaboration and integration of government systems would improve compliance and revenue protection.For now, the paradox remains: Uganda can see enormous amounts of gold leaving its borders, but the tax authority says it cannot always establish how much was produced, who produced it, or who supplied the refiners.-URNThe post URA Can’t Trace Origin of Billions in Gold Exports appeared first on Business Focus.