Dismiss Notice
You are browsing this site as a guest. It takes 2 minutes to CREATE AN ACCOUNT and less than 1 minute to LOGIN

Tanzania: Expert Faults Local Gold Investments country's earnings from the industry remain peanuts

Discussion in 'Jukwaa la Siasa' started by nngu007, Mar 31, 2011.

  1. nngu007

    nngu007 JF-Expert Member

    #1
    Mar 31, 2011
    Joined: Aug 2, 2010
    Messages: 15,874
    Likes Received: 28
    Trophy Points: 145



    30 March 2011

    DESPITE Tanzania being rated as the third largest gold producer in Africa after Ghana and South Africa, the country's earnings from the industry remain peanuts due to non-collection of corporate taxes as the mining companies allegedly operate under losses.

    The government levies corporate tax on taxable profit for all firms registered and/or carrying business in the country at the tax rate of 30 per cent. Loss making businesses therefore are not liable for corporate taxation.


    Audit Director with BDO East Africa (Tanzania) Juvinal Betambira told a coffee briefing at the World Bank offices in Dar es Salaam on Wednesday that all the giant mining companies in Tanzania were not paying corporate tax because they were reporting losses in their financial accounts.

    Mr Betambira, whose consultancy firm conducted the first reconciliation for Tanzania under the Extractive Industries Transparency Initiative (TEITI), said the government earnings from the mining sector was accrued from other taxes -withholding taxes, levies, excise duty, skills development levy and royalties.



    During the July 1, 2008 -June 30, 2009 period covered by the report, the government acknowledged collecting 128bn/- against the 175bn/- that the mining companies reported to have paid, creating a discrepancy of 46.5bn/-.
    He attributed the discrepancies to basis of computation, periods covered, currencies, mix up of flows, late timing, cu-off points, confusion and inability to generate information. The report covered eight mining companies and three firms.
    The TEITI report puts total tax revenue from mining, excluding PAYE and NSSF contributions, at 62bn/-, a mere 1.5 per cent of the total tax revenue of 4,044bn/- that the government collected in the 2008/09 financial year.

    Stakeholders decried the contribution of the otherwise lucrative industry to the national coffers as peanut, calling for swift measures to redress the situation. Critics have always raised concern over the mining industry, accusing investors of escalating operational costs and hiding some key information just to conceal profitability as a strategy to avoid tax liabilities.

    Chairman of the Multi Stakeholder Group (MSG) Judge Mark Bomani said the motive behind the transparency initiative was to increase transparency in the mining sector which had for years been operating under secrecy.

    "The major public concern regarding the mining sector has been the secrecy under which mining activities are carried out," said the retired judge, noting that the group has done a laudable job to promote transparency in the industry. MSG oversees the implementation of EITI.
     
Loading...