Uganda Publishes New Mining Tax Guidelines

Revised royalty rates and tax incentives now in effect. Our team can guide you through the changes.
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Uganda Unveils Sweeping Mining Tax Reforms: What Investors Need to Know

Kampala, March 28, 2024 – The Uganda Revenue Authority (URA) has implemented transformative changes to the country’s mining fiscal regime, introducing competitive royalty rates and new tax incentives that position Uganda as East Africa’s most attractive mining investment destination.

Key Changes Effective April 1, 2024

1. Revised Royalty Structure

Note: Gold royalty reductions apply only to new mining license holders for first 36 months

2. Corporate Tax Incentives

✔ 0% tax rate for first 5 years of production (up from 3)
✔ 50% deduction on exploration costs
✔ VAT exemption extended to all mining equipment

3. Export Benefits

• 10% tax creditfor locally refined minerals
  • Duty-free fuel imports for licensed miners
  • Fast-track VAT refunds within 30 days

Strategic Rationale

Commissioner General John Musinguzi explained:
“These reforms address three pain points: high startup costs, global competition for investment, and value addition. We’re now more competitive than Tanzania (5% gold royalty) and Kenya (5.5%).”

Impact Analysis

For Exploration Companies

• $150K savingson typical 10,000m drilling program
  • 18-month faster break-even on greenfield projects

For Operating Mines

• 12-15% IRR improvementon mid-tier gold operations
  • $2M+ annual savings for 50,000oz producers

For Local Processors

• 20% cost advantageover regional competitors
  • Priority access to Bank of Uganda’s $200M refinery fund

Great Rock’s Compliance Solutions

We’re helping clients navigate the changes through:

1. Tax Optimization Audits
   • Royalty vs. profit-based tax modeling
   • Transfer pricing frameworks
2. License Restructuring
   • Converting old licenses to new favorable terms
   • Joint venture tax efficiency planning
3. Customs Facilitation
   • Duty-free import certification
   • Export processing zone benefits

“Smart miners will save millions by restructuring now,” notes Great Rock CFO Paul Lubega. “Our team has already secured $3.2M in client tax savings this quarter.”

Investor Action Plan

🛑 Existing Operators:

• Recalculate fiscal models by May 30
• Submit license conversion applications

🟢 New Entrants:

• Leverage 3.5% gold royalty window
• Claim exploration cost deductions

📅 Critical Deadline:
Applications for grandfathering must be submitted by June 30, 2024

How We Can Help

📞 Tax Hotline: +256 700 TAX NOW (829 669)
📧 Email: taxteam@greatrocklimited.com
📍 Workshops: Bi-Monthly sessions in Kampala

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