EXCLUSIVE: Belgian Gold Dealer Goetz Makes $300m per Year in Uganda But Pays Zero Tax

A few years ago, wealthy Belgian gold dealer, Alain Goetz, of the famous Goetz family, arrived in Kigali, the Capital of Rwanda.

A flashy and imposing businessman, Goetz was in the city for a high-level business conference which attracted gold dealers from all walks of life.

The event also saw the attendance of prominent and influential gold dealers from Uganda including Barnabus Taremwa.

During the conference, Taremwa met with Goetz before exchanging pleasantries.

The two quickly connected considering that both were already well established in the gold business. The Goetz family had made millions of dollars from Burundi where they also ran an airline.

The Burundi government had closed Africa Bank of Commerce which was owned and operated by the Goetz family due to “dubious deals.”

City Airlines is said to have collapsed due to lack of cargo as it had been established for the sole purpose of transporting their gold exports to Belgium.

The family later formed Bekenrode 13, a company incorporated in Belgium.


It remains unclear if Taremwa conducted due diligence about Goetz family before the pair moved forward to establish Uganda’s first ever gold refinery plant in Entebbe and later falling out bitterly.

The Kigali meeting was the first step as Taremwa and Goetz strategized to do business together.

According to official records seen by ChimpReports, each partner agreed to make contributions towards the success of the company.

Being an established Ugandan businessman, Taremwa was required to obtain licenses for gold export and land within proximity of Entebbe International Airport for security reasons and also to reduce transport costs.

Goetz further asked Taremwa to obtain a tax concession for not less than 10 years.

The Belgian gold dealer would secure funds and put in place a gold refinery plant of international standards and raise enough working capital.

“Once we do this, we will be 50/50 percent shareholding,” the businessmen agreed.

As they were about to part ways in Kigali, Goetz also requested Taremwa, who was already trading in gold, to abandon his operations to avoid competing with himself if the new plant was opened.

Taremwa had to surrender trading and concentrate on the new business.

Taremwa’s condition was that the refined gold would be traded in Uganda Shillings.

For example, if a Dubai-based gold dealer wanted to buy refined gold from Uganda, he/she had to exchange their foreign currency to shillings.

“This would help our currency to appreciate against foreign currency,” said Taremwa.

Taremwa also demanded that Goetz had to procure a laboratory that tests the genuineness of all minerals.

Lastly, said Taremwa, the company would not deal with anybody without gold license.

“All suppliers regardless of their origin – whether Ghana, DRC, South Sudan etc must be licensed by those governments to operate,” emphasized Taremwa.

Africa Gold refinery (AGR) was eventually launched by President Museveni on February 20, 2017.

The partnership did not last long. Taremwa established that the gold laboratory put in place could not test all the minerals as earlier agreed.

Gold transactions

But most worryingly, Goetz would accept minerals from all sorts of gold dealers including conflict areas in the Democratic Republic of Congo.

This posed potential risks of UN sanctions on the leaders of AGR and the Ugandan government.

According to court documents, Taremwa says Goetz “deviated from operational requirements; refused to comply with restrictions on suppliers and when the board of directors asked him to explain the source of the gold, he started avoiding us.”

The United Nations Group of Experts on the Democratic Republic of the Congo which reports to the United Nations Security Council said in a report on New Year that the activities of AGR could attract sanctions.

“Two independent sources associated with AGR and Bullion Refinery Ltd. told the Group that the companies were reluctant to disclose the names of their suppliers because they were aware that their activities were not always legal,” the report to the Security Council reads in part.

“In fact, documents concerning a supplier for AGR obtained by the Group show the risk of contamination of the supply chain with gold illegally sourced or traded from the Democratic Republic of the Congo.”

According to the investigation, the supplier, a Congolese national based in Bukavu who provided AGR, in October 2018, with gold worth more than $3 million, travelled with an official document, delivered five months earlier, identifying his occupation as that of an electrician.

The supplier declared to AGR that the gold was sourced from Tanzania.

Initial investigations conducted by the Group suggested that the individual was used as a broker by many Bukavu-based gold smugglers.

Government loses tax

Yet, as all this happens, Uganda does not benefit from AGR’s gold deals as the company is on a tax holiday.

While AGR looks as a good investment for the country, authorities have expressed concern that Uganda does not “benefit from hosting its fraudulent activities that include evasion of both tax and non-tax revenues.”

According to a briefing sent to President Museveni, “there is no evidence to suggest that AGR imports gold through proper customs channels,” adding, “AGR is not operating any mine in Uganda that can support the source of gold in ease of an inquiry.”

The development raises concerns about the viability of tax holidays to investors whose businesses are not supervised.

An analysis conducted by the Tax Justice Alliance suggests that developing countries do not need to grant tax incentives, exemptions and/or holidays to attract Foreign Direct Investment (FDI), because the decision to invest by genuine multinational corporations is largely based on other parameters such as cost of labour and energy; presence of adequate infrastructure; and the country’s overall investment climate.

This has also been confirmed numerous times by IMF and the World Bank, which state that countries that are most successful in attracting foreign investors did not have to offer tax holidays, but rather invested in other important factors such as good quality infrastructure, low administrative costs of setting up and running businesses, political stability and predictable macro-economic policy that will encourage growth and expansion of indigenous investments.

The President was informed that anybody inquiring can conclude that “Uganda hosts a facility that is exporting gold obtained from conflict areas of DRC and could face international sanctions.”

It also emerged that the appointment of two prominent Ugandans including Taremwa as Directors of AGR was to “create a façade of making it appear as a project of very powerful people in the country and thereby create fear among the people supposed to scrutinize their business operations.”

There is a narrative that AGR is owned by Gen Salim Saleh and that his interests were taken care of by Taremwa, a brother of the army officer’s wife, Jovia Saleh.

Officials investigating the matter told ChimpReports that Saleh was not connected to AGR and declined on several occasions to meet its owners.

It’s, however, understood that by using this connection, the owners of the AGR have not been paying tax since they opened shop especially Corporation tax.

Minting Money

For example, as at June 30, 2016, AGR exported 5,306 kilograms of gold worth $222m (Shs 752bn). In the Year ended June 30, 2017, the company sold 9,185 kilograms of gold worth $407m (Shs 1.4tn); and in the year ended June 30 2018 put on the market 8,199 kilograms of gold worth $374m (Shs1.3tn).

The company’s records show in July 2018, AGR recorded sales of $20m (Shs 77bn) from 464 kilograms of gold.

“He imports the gold at Goetz but sells as AGR. Government does not in any way benefit from taking the risk of having this gold refinery business here in Uganda.”

Uganda’s current Tax-to-GDP ratio has stagnated between 12.5% to 13% over the past years, which accounts for an average annual tax generation of between 11.36 and 11.82 trillion shillings.

In the financial year 2015/16, the revenue forgone in the form of tax holidays was Shs 999.8 billion that constituted 1.1% of GDP. Such revenues foregone each year collectively are a lot of money.

In the period July 2016 to March 2017, URA collected shs9.2 trillion, but registered a deficit of shs25 3billion, which would have been covered with a surplus by the foregone revenue in form of tax holidays or exemptions.

According to documents tabled before the parliamentary budget committee in May 2017, government in the Financial Year 2016/17 spent Shs77bn to pay taxes for BIDCO Oil Refineries Ltd; Aya Investments Ltd; Steel and Tube; Cipla Quality Chemicals; Uganda Electricity Generation Company Ltd; and Uganda Electricity Transmission Company Ltd.

This is as a result of tax exemptions/incentives given to these companies that have for so many years continued to drain the treasury and take away critical revenues that would have been useful in other sectors of the economy such as trade, water and environment, and education.

No value addition

Government would have afforded to turn blind eye to Goetz’s alleged transgressions if it were benefiting from the business.

The hopes of establishing a gold jewelry business at the facility to reduce gold imports have since collapsed.

Statistics from the Bank of Uganda showed Uganda’s official gold exports had increased from 11 kg in 2014 to 1,118 kg in 2015, and to 8,751 kg, the highest ever recorded, in 2016.

From January to April 2017, Uganda officially exported 2,938 kg, which puts it on a pace to beat the 2016 record.

The revival of official gold exports from Uganda coincided with the 2016 opening of the country’s first gold refinery, AGR owned by Alain Goetz.

Accordingly, government should have collected between Shs6.98b and Shs34.9b in royalties using the applicable rates of 1 per cent and 5 per cent for the imported or locally mined gold respectively.

The Auditor General’s report indicated that the management assessed royalty and awarded export permits for only 93kgs of gold worth Shs11.8b.

“However, collaborative reports from the Customs and Excise Department of Uganda Revenue Authority indicated that 5,316 kgs of gold had been exported with a total value of Shs698b,” AG’s report for the year 2017 reads in part.

Uganda would have reaped more if the laboratory was adding value to the gold to produce jewelery.

“Instead of taking minerals to Mwanza for testing; it should be done here. Ugandans would not be buying expensive gold jewelery from Dubai,” said a source.

An official who spoke to us on condition of anonymity as he is not authorised to interact with the media said the Ugandan government needs to be more assertive in ensuring companies on tax holidays not only create jobs but also add value to locally produced goods.

Goetz says he invested about $15m in the gold refinery but earns an average of Shs 1tn ($363m) in gold sales per annum. Before the expiry of his 10-year tax holiday, Goetz will have made sales of about $3bn in gold with the Ugandan government not registering a cent in its treasury.


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