The Auditor General has raised the red flag on possible tax revenues lost through export and import of minerals in the country.
In his latest report to Parliament, John Muwanga, the auditor general, noted that over the last two financial years the country has lost more than Shs 35 billion in undeclared mineral imports and exports.
The money can roughly buy 12 million packets of the averagely priced sanitary pads that can be given to young adolescent girls in rural schools.
This is partly because many people who deal in minerals rarely obtain a permit as required by the law, therefore their activities are not monitored.
According to the law, a person who imports any minerals must make a declaration before a customs officer regarding the type and quantity of minerals imported, after which they are issued with an import permit.
Yet a review of the URA customs data by the Auditor General revealed that revenue amounting to Shs 8.3 billion from the import of Vermiculite, a rare mineral and Shs 26.3 billion of Tungsten and Tantalum exported out of the country could have been lost.
Vermiculite is used in things like brake and clutch linings as well as gaskets and rubber seals. It can also be used in manufacture of automotive paints. Tungsten is used in the manufacture of heavy metal.
“Without notification of the Department of Geological Survey and Mining (DGSM) by URA customs as required, there could be significant potential revenue losses in terms of uncollected royalties. Management explained that in terms of mineral exports, the Ministry will continue engaging the URA to ensure that mineral exports are accompanied with permits,” the report notes.
The auditor general said the ministry pledged to harmonise the exports from the URA with the one of the ministry and assess and collect the royalty due.
“I advised management at MEMD to liaise with URA to ensure that there is timely notification of the DGSM before minerals are imported or exported so as to ensure royalties have been computed, mineral origins are ascertained and import and export permits issued as required by the law,” the report notes.