Dar es Salaam, Tanzania — MININGREVIEW.COM — 08 April, 2008 – Tanzanian government action to raise mining taxes will work directly against the country’s aspirations of attracting foreign investment and becoming one of the mining giants of Africa, and it should concentrate instead on providing the infrastructure required to support the country’s mining industry.
The Kampala-based “East African Business Week” quotes a statement released here by the Tanzania Chamber of Minerals and Energy as saying that the future holds bright prospects for the country, but not through further taxation, because that will reduce Tanzania’s global competitiveness in attracting investment in mining.
Instead, the Chamber has urged government to improve on infrastructure development in order to attract more foreign companies. It has advised the government to develop roads, improve railways and ports, and provide reliable electricity to support its growing mining sector.
The newspaper quotes the Chamber as expressing a definite opinion that Tanzania, is estimated to have 1 billion ounces of unexploited gold. “Only 4% of the country’s gold potential is being exploited currently,” the article adds, “despite it holding the enviable position of being Africa’s third largest gold producer. “
The Chamber says the Tanzanian government received a total of US$255 million (R2 billion) in statutory taxes and royalties from the large mining operators in the country between 1997 and 2005, while foreign shareholders did not reap any dividends from the gold mining operations during the same period. Their member mining companies produced gold worth US$2.5 billion (R20 billion) during this period, and remitted to the government US$74.7 million (R600 million) in royalties alone.