Uganda’s export earnings recorded a significant drop due to a government levy slapped on gold exports.

Rebecca Nalumu, the director for business development at the Uganda Free Zones Authority (UFZA), said their provisional data indicated that Uganda’s export earnings from the zones dropped to $78 million in the financial year 2021/22, The Observer, a weekly newspaper, reported.

UFZA registered export earnings of $150 million and $1.2 billion in financial years 2019/20 and 2020/21, respectively. 

The government imposed a 5% levy on every kilogram of refined gold and a 10% levy on every kilogram of unprocessed gold for export from July 2021.

According to the Bank of Uganda’s June 2022 data, the country did not register any gold exports between July 2021 and April 2022. The newspaper said this was the first time in the last six years that Uganda did not register any gold exports.

However, talks are underway with the finance ministry, Uganda Revenue Authority, and other policymakers to ensure a more acceptable levy.

“This will encourage the licensed companies to process their gold and sell it to their respective buyers,” Nalumu said.

Uganda has majorly been exporting refined gold bars to the UAE, the newspaper reported.

(Editing by Seban Scaria )