Rwanda to double its mining revenue
June 28, 2013
Bloomberg News quotes state minister in charge of mining Evode Imena as saying that income will grow to US$16 million in the 12 months through June 2014 from around US$8.9 million a year earlier. Finance minister Claver Gatete this month introduced a 4% royalty tax on the value of basic metals mined and a 6% levy on precious metals and gems.
The tax “will make a significant increment in the share of direct and indirect taxes generated from the mining sector,” Imena said.
Rwanda is the world’s fourth-biggest producer of tantalum, a metal used in mobile phones and video-game consoles, accounting for about 12% of global production last year, according to the U.S. Geological Survey. The Central African nation also produces tin, tungsten and gold, while companies including Simba Gold Corporation and Desert Gold Ventures Incorporated, both based in Vancouver, operate in the country, according to the agency’s website.
Rwanda’s mining industry is expected to generate US$190 million of revenue this year, compared with US$136.6 million in 2012, Inema said. That figure may more than double to US$409 million by 2017, prime minister Pierre Damien Habumuremyi said in March.
The level of taxes in the industry “are still low compared to the income generated by the sector,” Inema said. “This is due to the complexity of taxation of the mining industry, and a number of investment incentives provided to investors, including exemption of import duties on machinery.”
The Mining Association of Rwanda, an industry body based in Kigali, said it had disagreed with the Finance Ministry about the introduction of the tax in talks that took place before it was announced.
Mining is Rwanda’s second-biggest foreign-exchange earner, after tourism, according to the Rwanda Development Board’s website.
Source: Bloomberg News. For more information, click here.