Uganda Lost Shs 5.9 Bn in Uncollected Royalties from Gold Exports – Auditor General

Uganda lost up to Ushs 5.9 billion in revenue in uncollected royalties from gold exported from the country in the financial year 2016/17, according to the newly released Auditor General’s report.

The report which was released on Friday indicates that the money was lost in undeclared gold exports and imports on the rates of 1% and 5% for imported and locally mined gold respectively.

The Auditor General, John Muwanga handed the report to the Speaker of Parliament, Rebecca Kadaga and later addressed the press.

According to the Mining Regulations 2004, minerals including gold which are obtained under a mineral right or a mineral dealer’s license can only be exported using an export permit granted by the Commissioner at the Directorate of Geological Surveys and Mines (DGSM) in the Ministry of Energy.

However, findings by the Auditor General unearthed inconsistencies in the gold exports recorded by the Directorate of Geological Surveys and Mines and the exports figures declared to customs and excise departments of the Uganda Revenue Authority (URA).

While the Directorate of Geological Surveys and Mines issued gold permits for only 16.28 kilograms of exported gold in the year 2016/17, records from URA showed 8,691 kilograms of gold valued at USD 339 million, the report says.

“The country lost revenue ranging from USD 3.39 million to USD 16.95 million in royalties from undeclared gold exports and imports depending on the applicable rates of 1% and 5% for the imported and locally mined gold respectively,” the report by the Auditor General reads.

In other anomalies relating to gold exports, it was discovered that one exporter was granted export permits by the Ministry of Tourism, Trade and Industry as opposed to the Directorate of Geological Surveys and Mines which contravenes with the law (Mining Act).

“There was equally no evidence of payment of royalties on the exported gold,” says the report.

In its recommendations, the Office of the Auditor General has advised the DGSM management to expedite investigations into the discrepancies with a view of recovering the prescribed royalties.

While addressing journalists after handing in the report to Speaker, the Auditor General said that the exercise was in accordance with Article 163 (3) of the Constitution adding that the report was submitted to Parliament on December 29, 2017.

He said that the report focuses on the audit matters and emerging trends that may need urgent attention by those charged with management and governance of the audited organisations to improved public accountability in the processes of delivering public service.