HomeBase MetalsTanzania introduces 30% corporate tax

Tanzania introduces 30% corporate tax

Bulyanhulu gold mine
“’ one of four owned
by African Barrick
in Tanzania
Dodoma, Tanzania — 30 July 2012 – The government of Tanzania “’ Africa’s fourth largest gold producer “’ has told mining companies operating in the country for more than five years to start paying a corporate tax of 30%, citing rising prices of precious metals on the world market as the reason.

Reuters quotes energy and minerals minister Sospeter Muhongo as telling parliament that Tanzania’s gold export earnings rose 31% last year to US$1.879 billion from US$1.436 billion a year earlier on higher world prices for the commodity.

The minister said the government wanted to earn higher revenues from mining companies due to the rising gold price, and added that it had ordered audits of all large-scale gold mines in the country to ensure that they started paying corporate taxes after recovering their costs of production.

“I am instructing all mining companies that have been in operation for more than five years to start paying corporate tax without any excuses,” he added. “If they claim they are still making losses and can’t contribute to the national economy through taxes, they should shut down their mines and leave because minerals do not rot.”

Major gold mining companies in Tanzania include African Barrick Gold plc, which has four gold-producing mines, AngloGold Ashanti Limited and Resolute Mining Limited.

He did not say which of these mines were affected, but said Geita Gold Mine owned by AngloGold Ashanti and the Golden Pride mine owned by Resolute had already paid a total of 228.5 billion shillings in corporate taxes.

Muhongo revealed that the government was evaluating 11 bids from investors for a stake in the state-run Buhemba gold mine, and had also invited bids for a joint venture project to develop a state-run coal mine with 35.5Mt of reserves. “By June 2012, the State Mining Corporation  had received bids from 16 foreign and local companies to enter into joint venture to develop this project,” he added.

Muhongo went on to say that Tanzania had 136.5Mlbs of uranium oxide, with Australia-based miner Mantra Resources given a go-ahead to build a US$450 uranium mine at a world heritage park, after the project had received approval from UNESCO, the U.N. cultural agency.

Source: Reuters Africa. For more information, click here.