- Uganda resumes its gold trade after a year.
- The suspension came as a result of gold merchants protesting the gold tax levy.
- A new levy has been proposed and gold merchants have already resumed exports.
According to the Bank of Uganda, the nation has resumed its gold trade after 12 months of suspending trade of the precious metal.
The bank detailed in its October report that gold trading resumed in August. The report also elaborated on composition and the value of exports, noting that the trade returned a 32 percent growth in export receipts, which had declined for more than a year.
Gold merchants in July of 2021, suspended trade as a result of disproportionate taxes.
Gold is one of Uganda’s highest valued exports, bringing in an average of $172.2m. Prior to the suspension of the mineral’s export, gold accounted for at least 44% of Uganda’s total export earnings.
However, this fact did very little to deter gold dealers who decided to strike based on what they termed an unfair tax regime.
In April last year, the Ugandan government presented a charge of $200 (Shs762,356) for every kilogramme of exported gold, which was slated to be implemented in July 2021.
This did not sit well with players in the market who decided to temporarily hang their boots.
Dr Adam Mugume, the director of research for the Bank of Uganda, disclosed to the Monitor that “export receipts had been affected by failure to register gold exports due to a tax-related dispute between government and dealers.”
The loss propelled the Ugandan government to concede to the demands of the merchants, inadvertently returning export of gold to the economy. The rate proposed for all gold exporters, is a charge of $100 (Shs381,178) or a 5 percent levy of the value of every kilogramme of exported gold.
The agreement also covered the ban of exporting unrefined gold. Uganda exports 96.1% of its gold to the Middle East.
