Lawmakers sitting on Parliament’s Public Accounts Committee on Tuesday quizzed officials from the Ministry of Energy and Mineral Development over failure to collect UGX 5 billion in gold taxes, something they say creates anxiety among other taxpayers who continue to pay their dues to the Government.
This followed a finding by the Auditor General, John Muwanga that between July 2022 and 3rd March 2023, a total of 7839.1Kgs of processed gold were exported, from which the Government was expected to collect export levy amounting to UGX 5.811 billion.
The Auditor General found out that only UGX 428.7 million was collected by the Uganda Revenue Authority, leaving an outstanding unexplained balance of UGX 5.383 billion of uncollected taxes.
Irene Batebe, Permanent Secretary, Ministry of Energy and Mineral Development, informed the Committee that the outstanding export levy amounting to UGX 3.178 billion was due from three gold exporters who obtained a court order halting the collection of export levy on gold. She also said the balance of UGX 2.204 billion was due from one exporter who had made a partial payment on the total levies.
Muwanga Kivumbi, Chairperson PAC-Central Government, tasked the Ministry to furnish Parliament with the names of the directors and companies that are defaulting and failing to pay taxes.
We are a country losing revenue, and good people both in the Ministry and Attorney General’s office aren’t making any effort to either appeal or recede that action; you are simply telling us that something will happen, is that a responsible way? As an implementing agency tasked with this enviable tax, are you comfortable that six months down the road, there is no action whatsoever, and the country is losing revenue, said Kivumbi.
Paul Omara, Otuke County MP, wondered if Batebe was aware of the fact that gold exports are now our number one revenue earner in Uganda, yet in terms of its revenue contribution, gold is literally nowhere, a discrepancy he blamed on the gymnastics going on in the Ministry and the gold miners.
The law was passed, there are tax laws in place, those guys never paid any tax. Is this too much of a big elephant for you people to handle? Because I sit on the Finance Committee, this country is looking for revenue everywhere, and when we pass those tax bills, URA will just assemble the tax communities, walk them through the responsibilities, and everybody starts paying taxes now with this one, you have the arrears, they are known you said they are collaborating, but people aren’t paying, I think you need to tell this Committee where you are failing because I know URA when you don’t pay, they garnishee the accounts, have they garnished the accounts? asked Omara.
Sarah Opendi, Tororo District Woman MP, asked the Ministry to explain what steps the Government has undertaken to deal with the court order that was sought by gold exporters to stop this tax.
If these companies went to court, and they have a court order, what has the Attorney General done to date in seeing to it that the court order is vacated? she asked.
Batebe responded that Attorney General Kiwanuka Kirywowa appealed against that court order, and the application for that temporary injunction was dismissed by the court, a revelation that angered MPs tasking the Ministry to explain what is then stopping the Government from demanding the gold exporters to pay their share of taxes.
The Ministry also attributed the delays in collecting gold tax to a Presidential directive issued during a Cabinet meeting.
But, when asked to provide evidence to back those claims, Batebe failed to furnish any evidence hence prompting Geoffrey Ekanya, Tororo North MP, to ask the Committee to summon President Museveni to explain his directives.
This is the time that we MPs shouldn’t just allow the President to chair the Cabinet and make decisions out of the law. Even under the Constitution, the President is the Minister of Finance; we can use that provision to summon the President to appear before this Committee to explain his directives that are causing tax losses and confusion among the technical people and for implementation of Government programmes, said Ekanya.
Kivumbi tasked the Ministry of Energy to provide evidence to show that the halt in the collection of gold taxes was a result of a presidential directive.
Then quickly you go ahead to say there was a presidential directive, but the auditor general is saying to the contrary, there is the law, then there is what you people run with, the presidential directive, how do you ensure that the presidential directive is exercised within the ambit of the law or when you hear Presidential Directive, you just run regardless of the law, added Kivumbi.
Electricity issues
The MPs also accused officials from the Ministry of Energy of conniving with some electricity companies through payment of deemed energy. This followed an Audit query on why the Ministry received a supplementary budget to the tune of UGX 104.135 billion without proof of a request for those funds.
On this, Batebe confessed that the supplementary budget was initiated by the Ministry of Finance, contrary to the law that requires user entities to make requests for funds.
The Auditor General also audited the payroll of the Ministry of Energy, where he cited that one individual who had already drawn a salary worth UGX 32 million in a single year wasn’t accounted for, while another group of five staff on short-term contracts were paid UGX 32.9 million in a single year, yet these were found to have absconded from duty or retired, and it was after the audit that these individuals got removed from the payroll.
A scrutiny of the Ministry of Energy’s payroll indicated that seven employees on the main payroll had inconsistencies in their dates of birth when compared with the data captured in the payroll and data from the National Identity Cards.
The Auditor General unearthed further rot in the Ministry’s human resources, revealing that out of 614 approved positions, 389 positions were filled, leaving 225 vacant positions. Additionally, four of the filled positions found at the time of the audit were not on the structure, and one was overfilled.
The Ministry was also faulted for recruiting 97 staff on a contract basis without vacancies in the approved contract staff establishment, while Auditors also accused the Ministry of overestimating its wage bill to the tune of UGX 5.461 billion.
