No tax holidays, report says KILASA MTAMBALIKE in Dodoma Daily News; Wednesday,July 09, 2008 @20:10 THE Presidents Committee on the Mining Sector has advised the government to stop throwing away the countrys riches in lavish tax exemptions, saying the investors dont need any such coaxing. Instead, the Committee recommends increased royalties based on gross rather net-back values, which often suffer from under-declarations and other ways employed to evade tax. The Committees report tabled before Parliament this week also advises the government to put a real premium on the countrys mineral wealth and tax investors accordingly. The government should also impress upon potential investors they will be working under relative peace and stability, democracy and the rule of law and good governance these are better attractions than tax exemptions, the report recommends. It recommends that royalties on diamonds and other gems be increased from five to seven per cent, and that of other metallic minerals such as gold from three to five per cent. If the recommended rates were used in 2007, the government would have earned $46.47 million instead of the envisaged $28.12 million in royalties from sales of diamonds and gold that totalled $917.78 million, the report says. The governments should also charge fuel levy on mining firms that now enjoy across-the-board exemptions of up to $200,000. If the companies were to be charged fuel levy the government would have collected an extra 32.7bn/- during the 2007/2008 financial year, it further says. According to the report, it is estimated that the government is to lose 59bn/- due to excise duty exemptions on fuel to gold mining companies during the 2007/2008 financial year. The report also recommends that mining of gems and medium-scale mining companies be owned by Tanzanians by at least 50 per cent -- if not 100 per cent -- and that the government through the Tanzania Investment Bank (TIB) should start a department to empower locals. Investing in the establishment of mining townships is also of significance if the people are to see the benefits of the countrys minerals, the report also says. The government should make sure that all necessary infrastructure such as roads, water and electricity are put in place in all mining areas. Considering the importance of the sector, the government should do the task on its own, the report says. The report also recommends that all sources of cheaper energy should be developed under the ownership or supervision of the Tanzania Electric Supply Company (Tanesco) citing the Stieglers Gorge for hydropower; and the three premiere coal reserves at Kiwira, Mchuchuma mine and Ruhudji mining sites, among others.