Tanzania collects $43m in taxes from mining operations

DAR ES SALAAM, Tanzania--The government has collected Tsh70billion (about $43 million) from mining companies in tax royalties between May and November this year.

This was revealed after a recent ministerial advisory board meeting chaired by the Tanzania Mineral Audit Agency (TMAA) Advisory Board Chairman Dr Yamungu Kayandabila.

Dr. Kayandabila said the total income taxes from Resolute Tanzania Limited Mining Company since its inception in 2010 has reached Tsh97 billion ($60 million) while about Tsh6.1 billion ($3.7million) was realized in tax from the same mining firm between May to November this year

“Geita Gold Mining Limited has so far paid income tax amounting to Tsh304.2 billion ($189 million) since 2009 whereas around 4.8 billion ($2.98 million) was realized as income tax between May to November this year,” Dr Kayandabila said.

He said despite most mining firms being compliant with paying their taxes, there were still a few that have been dodging.

Apart from royalties, mining firms have to pay a skill development levy, Pay-As-You-Earn and service levy. However by smuggling the minerals out of Tanzania, culprits can evade payment.

He said that the country has so far recovered Tsh1.9 billion ($1.18 million) between May to November this year resulting from the strict surveillance scheme that has been instituted by TMAA to make sure Tanzania mineral resources are prevented from being smuggled outside its borders.

“Around 32 smuggling cases have been reported worth Tsh15.03 billion ($9.3 million) since TMAA instituted inspections at airports in 2012, Dr. Kayandabila said, adding that TMAA has also strengthened audit exercises in major mining firms in Tanzania,” he said.

He cited Tulawaka, Mwadui, TanzaniteOne, Ngaka Coal Mines, Golden Pride, Bulyanhulu Buzwagi, North Mara and Geita Gold Mine.

He said around Tsh77.4 billion ($48 milllion) in tax was collected from Tulawaka Gold Mine since its inception in the country while around Tsh178.9m ($111,429) was collected from Williamson Diamonds Limited. Tullawaka Gold Mine was previously owned by African Barrick Gold.

The Deputy Minister for Energy and Mineral, George Simbachawene said there was need for the government to ensure that TMAA’s performance contributes to the country’s economic successes.

Simbachawene said Tanzania was very much determined to ensure its per capita GDP income reaches (Tsh4.8 million) $3,000 by the year 2025 from the current $640 (Tsh1.02 trillion. The government is putting great importance on mineral resources in playing an important role in realizing the dream.

He said the government is keen to ensure that the required mechanisms are put in place so that it can fully utilize the returns from mineral resources.

Source: East African Business Week: Monday, December 16th, 2013

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