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Bulk of mining taxes comes from workers

Discussion in 'Jukwaa la Siasa' started by BAK, Feb 15, 2011.

  1. BAK

    BAK JF-Expert Member

    Feb 15, 2011
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    Bulk of mining taxes comes from workers Tuesday, 15 February 2011 07:16

    By Florence Mugarula
    The Citizen Reporter
    Dar es Salaam.

    Despite claims of a boom in Tanzania’s mining industry, the bulk of taxes paid to the government comprises deductions from the workers’ wages and not levies on extracted minerals, it has been revealed.At least 54.5 per cent of the taxes collected from mining, gas and oil companies in the country are being paid by ordinary workers in form of various taxes, according to a new report released here yesterday by the Tanzania Extractive Industries Transparency Initiative (TEITI).

    According to the report, the government depends more on labour tax than production by mining companies to boost revenue from the sector.

    Commenting on the report, a development analyst criticised the government for concentrating on attracting investment in mining instead of planning the sector’s development.

    “We have established that minerals, gas and oil are not contributing as required to the national income,” said Mr Bubelwa Kaiza, executive director of Concern for Development Initiatives in Africa (ForDIA.

    He told a mining stakeholders’ meeting here yesterday that most of the income attributed to the sector was collected as pay-as-you-earn (PAYE) taxation on wages.

    Researches have established that most of foreign investors in the sector were not contributing effectively to the government revenue, Mr Kaiza asserted.

    According to the TEITI report, apart from labour taxes which account for over 50 per cent of receipts from the mining sector, stamp duty contributes a mere 0.3 per cent, mining lease 0.9 per cent and import duty adds 34 per cent .
    “There are many investment attractions in the mining sector than the profit which is expected to be generated from projects. We are paying more than we get,” said Mr Kaiza.

    For nearly 50 years of national independence there has been no strong presence of local investors in the exploration and exploitation of minerals, gas and oil deposits in the country.

    “Investors are always coming from abroad because Tanzanians have neither the technology nor the required capital to run such enterprises which are capital intensive,” Mr Kaiza observed.

    In his opinion, Tanzania’s failure to capitalize on its abundant mineral wealth was due to lack of strong mining policies and information on the part of the government while the population generally was not enlightened about mining issues.
    In 2009 Tanzania became EITI candidate country, a preliminary stage towards membership.

    Mr Kaiza hailed the report as a very important tool for the development of the mining sector saying “it provides a direction on where the sector is heading to.”

    The report notes as an outstanding issue the fact that mining companies recorded huge amounts of money paid to the government while the treasury had no evidence to verify receipt of the payments.

    “The report shows that no single cent has been paid to the treasury by these mining companies,” said Mr Kaiza, suggesting that the government should order investors to deposit their cash in local banks in order to boost the country’s economic development.

    While the government claimed it received a paltry amount of money, he said it has been established that the Tanzania Revenue Authority (TRA) and the ministry of Energy and Minerals have been collecting taxes from mining, gas and oil companies.

    In July 2010 the MSG called on all major mining, oil and gas companies to submit reports on all payments that they made to the Government and its agencies. The companies obliged accordingly within a two-week deadline.
    It was revealed last week that over Sh24 billion which mining companies claim to have paid in taxes could not be traced on government books.

    An audit conducted by Hart Nurse Ltd confirmed that the Government acknowledged receipt of less amount of money than what the companies claimed they had actually paid.

    Multi-Stakeholder Group (MSG) of the Tanzania Extractive Industries Transparency Initiative (TEITI) contracted Hart Nurse Ltd to examine the payments made by the major mining and gas operating companies to the government for the period of July 2008 -June 2009.

    Chaired by retired Judge Mark Bomani, TEITI operates as a local affiliate of global Extraction Industries Transparency Initiatives (EITI).
    Hart group has established that the extractive companies paid about Sh89 billion to the government, which, in turn, reported to have received Sh64 billion only.

    At the launch of the report, Mr Bomani said that copies of the document would be handed to relevant authorities so that the discrepancy could be investigated and ironed out.

    In addition, Mr Bomani said the report would be submitted to the Controller and Auditor General’s office for further evaluation to establish the causes of such differences in revenues.

    But, he said that the reconciler was also making efforts to find out the cause of discrepancy.
    “After further assessment we will establish whether there were cases of improper accounting, conversion from US dollars into shillings or misuse of the money collected,” he added.
  2. Chapakazi

    Chapakazi JF-Expert Member

    Feb 15, 2011
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    totally agree. Leo hii nataka kuanzisha kampuni yangu ya kuchimba madini. je procedure kwangu mimi mzawa ni rahisi kiasi gani? Nitapigwa danadana au watanibebe kama wawekezaji kutoka nje?
  3. Ndachuwa

    Ndachuwa JF-Expert Member

    Feb 15, 2011
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    Sector ya madini inapata Refunds za VAT toka TRA; inawezekana wanachoonyesha TRA ni kodi halisi baada ya kuondoa marejesho ya VAT yaliyolipwa kwa makampuni ya madini.

    Let us wait and see
  4. P

    Paul J Senior Member

    Feb 15, 2011
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    Tax payers of Tanzania have you asked yourselves why do you pay tax?

    Sit down and do simple mathematics, from the date you started working and paying PAYE how much have you paid so far and how much you would have to pay up to your retirement and how do you benefit from it?

    I know most of you you have no reliable water, you are using medical insurance cards, roads are poor, powerblackout as usual, your kids never attend yeboyebo school, so why do you pay?

    Taxpayers need the government to be responsive for these basic human needs that's is the function of the tax!

    Corrupt government and poor leadership is the root causes of all of these evil issues sorrounding the country! These investors have corrupted the entire system and it can not even think, can someone pay salary to workers without production! In fact the government is loosing a lot of money that will not be recoverable anywhere, the deficit of 24bilions might be in the pocket of clever men like RA.

    It is a right time for we Tanzanians to realize how the system is making us poor and follow the footstep of Egyptians and others otherwise the rate of deterioration of the national wealth is in danger!
  5. Muangila

    Muangila JF-Expert Member

    Feb 15, 2011
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    Mi nafanya kazi kwenye kampuni ya uchimbaji dhahabu PAYE ninayokatwa kila mwezi ni 321,000 na take home ni karibu 400,000 yani take home na PAYE zimekaribiana sana, Je ni mfanyabiashara gani anayeweza kulipa kodi kama hii kila mwezi? Ukweli selikari inatuumiza tunaathirika afya zetu kwa mazingira magumu ya kazi faida wanakula wao TUTAFIKA KWELI