- Aug 2, 2010
Sat Sep 24, 2011 8:20pm GMT
WASHINGTON, Sept 24 (Reuters) - Tanzania is not rushing to increase taxes on mining companies, but is talking to the firms and expects to have an arrangement in place by the end of the financial year in mid-2012, the finance minister said. Tanzania is Africa's fourth-largest gold producer and its mining sector has attracted major investment over the past decade, but rising prices for gold and other commodities have put the government under pressure to get a bigger take.
"It's not a question of saying we'll be doing that from tomorrow. It's an issue being discussed with the companies," Finance Minister Mustafa Mkulo told Reuters on the sidelines of IMF/World Bank meetings in Washington.
"We expect by 30 June next year we might come up with something," he said. Tanzania's financial year runs from the middle of one year to the next.
Tanzania has been in talks with mining companies to allow the government to raise royalty payments on gold exports to 4 percent from 3 percent as well as on reviewing other taxes in line with legislation passed last year.
Tanzania's annual gold exports have tripled to $1.5 billion in the last five years due to the increase in the price of gold but government revenues have remained at around $100 million a year. The government has said it would not impose new royalty payments on existing mining companies, but seek voluntary compliance.
Mining has been a big driver of Tanzanian growth and Mkulo estimated growth would reach 7 percent for the 2011-2012 financial year.
He said that the drop in gold prices in recent days would not have an impact on the discussions on increasing the taxes that mining firms pay.
African Barrick Gold (ABGL.L: Quote) has four gold mines in Tanzania while Australia's third largest gold miner, Resolute Mining (RSG.AX:Quote) and South Africa's Anglogold Ashanti (ANGJ.J: Quote) also have gold mining operations there.