Uganda seeks to scrap mining taxes to attract investors

February 10, 2015 Posted by admin

CAPE TOWN Feb 10 (Reuters) – Uganda’s new mining law seeks
to scrap a series of taxes and introduce bidding rounds for
exploration licenses with the aim of attracting investors to a
long-neglected sector, the mining minister said on Tuesday.

The east African country, which is on track to become an oil
exporter, says geological surveys have revealed significant
deposits of a range of minerals including iron ore, gold,
uranium, rare earths, titanium and diamonds.

The new law, to be reviewed by cabinet in March, proposes to
abolish the exploration tax as well as an 18 percent value added
tax (VAT) on mining equipment to lure investors into the sector,
Peter Lokeris, state minister for minerals and energy, said.

“We found the exploration tax to be so prohibitive, the
companies are really complaining,” Lokeris told Reuters on the
sidelines of the Mining Indaba conference in Cape Town.

The draft bill, which needs to be passed by parliament first
after getting the go-ahead from cabinet, also recommends moving
away from the “first-come, first-served” exploration licensing
policy to help eliminate passive speculators.

“We want to streamline this by instituting the procedure of
bidding rounds,” Lokeris said.

Although Uganda has done little to tap its mineral
resources, it has estimated oil reserves of 3.5 billion barrels
discovered in its western region along the border with the
Democratic Republic of Congo in 2006.

But production has been repeatedly delayed by contractual
disagreements, tax disputes and infrastructural setbacks.

(Reporting by Wendell Roelf; Editing by James Macharia)

© Thomson Reuters 2015 All rights reserved

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