26th March 2011 Diamonds merchants in Shinyanga Region are cheating the government out of millions in unpaid customs and excise duties, by colluding with corrupt officials to spirit exploited minerals out of the country via illegal channels, The Guardian has learned. Our investigation has unearthed evidence that unscrupulous diamond traders are knowingly and deliberately evading taxes: an act that has grave ramifications to our national economy. Working with crooked politicians and dishonest government officials, the mostly foreign merchants are systematically sabotaging government efforts to collect relevant excise duties from their operations. Some of the methods used to deny the govt its rightful taxes and mineral-sale royalties which includes underreporting company revenues and doctoring purchasing data to show the firm bought smaller, lower quality diamonds than it actually did. Sara Diamonds (T) Limited, for instance, is alleged to have lied to the government about a 176 carats diamonds it purchased from small-scale miners at Maganzo and Mwanangwa in Mwanza Region, who claim they were paid a mere 50m/- for the remarkably large gemstone. The miners accuse the company of profiteering at both the purchase point and the resale point, saying it fraudulently sold the diamond to some foreign company at an exorbitant price, relative to what they were paid, and then defrauded the government by understating both the stones purchase price, and its selling price. The company a local subsidiary of Lebanon-based Sara Diamonds Limited disputes these claims, saying it bought the diamond for 170m/-. This reporters in-depth investigation revealed that Sara Diamonds (T) Limited sold the 176k gemstone to its parent company for an estimated 4.5bn/- which is far below its estimated value of at least 5.7bn/-. Instead of the 275m/- it was legally entitled to, the governments take from this sale was a mere 12m/- in mining royalties (approx. USD8,000). The Guardian contacted Western Zone Mining authorities for details, where Deputy Mining Commissioner Oforo Ngowi confirmed that local miners had found massive diamonds late last year, and had sold the stone to the Shinyanga-based diamond merchant. When asked to clarify the process of collecting revenues and mining royalties as it applies to exportation of diamonds and other precious gemstones, Ngowi refused to comment, instead he directed our reporter to the office of the Shinyanga Regional Commissioner. The RCs office confirmed that it had received information regarding the finding and subsequent sale of the large diamond, and promised to get back to the press when it could offer more details on the matter.