Museveni makes U-turn on taxing extractives investments
In a complete turnaround to what he promised the mining industry last year, President Yoweri Museveni yesterday told delegates at the just concluded Mineral Wealth Conference in Kampala that government would not give any tax subsidies to investors in the mining sector because he had been advised against it by the Uganda Revenue Authority (URA).
At last year’s conference, President Museveni had indicated that the government would consider scraping Withholding Tax and Value Added Tax on mining investments, arguing that it was unfair.
But now the President says he has been advised against the move by the country’s tax collection body.
“Uganda Revenue Authority has advised me that taxing will help clean up the internal system of these companies,” he said. “When I challenged URA and asked why they should tax one who has not yet made wealth, they said that they are not taxing the mining operations but the services of the companies. For instance, when you hire a company, that company earns and therefore they tax that income of the service provider,” he explained.
He however added that taxes levied shall vary from one investor to another depending on the profitability of the investment.
“Mineral prices are volatile; they can be high now and low tomorrow. We take that into consideration,” said the President.
Museveni emphasised the need for value addition to the country’s minerals, particularly iron ore, arguing that exporting raw minerals denies Ugandans income as well as employment opportunities.
“There will be no export of iron ore, no way; over my dead body,” he said sternly.
“We can’t be part of these mistakes in African countries. Let’s embrace value addition,” he advised.
The two day conference was organized by the Uganda Chamber of Mines and Petroleum and attracted local and international investors, top government officials and civil society organizations.
Report by Flavia Nalubega and Beatrice Ongode