Major foreign gold mining companies earned $6.967bn (Sh11.495 trillion)
between 2009 and 2012, according to the current exchange rate of
Sh1,650 against the US dollar, but paid the Tanzanian government
corporation tax amounting to only $280million (Sh473.8billion) over that
period.
Corporation tax is charged on gross profit of any company doing business in Tanzania under the current law, under which the Tanzania Revenue Authority (TRA) takes 30 percent of the posted profit.
According to data released by the Tanzania Mineral Auditing Agency (TMAA), Geita Gold Mine was the leading gold mine, which contributed about Sh299.4bn, followed by Resolute Tanzania Ltd which paid a handsome Sh97bn/-. Tulawaka gold mine, owned by African Barrick Gold, came third and paid Sh77.4bn/- during the same period.
Althhough African Barrick Gold is the largest gold producer in the country, its contribution in corporation tax remains abysmal because the company continues to declare losses at its North Mara, Bulyanhulu and Buzwagi mines.
Data from the Bank of Tanzania – eliably obtained by the Guardian -- show that in 2009 Tanzania’s gold exports rose to $1.076 billion in 2009, up from $932.4 million in 2008 when gold prices per troy ounce reached $972million.
In 2010, the value of gold exports rose by 31 percent, reaching $1.365 billion, thanks to world’s gold prices that reached $1,112 per troy ounce.
Data from the Tanzania Central Bank further shows that in 2011 gold exports rose by 47 percent, reaching $2.226bn/-, when the price per troy ounce also rose to a record $1,568.
In 2012, gold exports rose to $2.300bn as the price per troy ounce surged to $1,700.
Over the same period, production cost per ounce ranged between $650 and $890 per ounce -- depending on the type of the mine as well as the ore grade available.
Corporation tax is charged on gross profit of any company doing business in Tanzania under the current law, under which the Tanzania Revenue Authority (TRA) takes 30 percent of the posted profit.
According to data released by the Tanzania Mineral Auditing Agency (TMAA), Geita Gold Mine was the leading gold mine, which contributed about Sh299.4bn, followed by Resolute Tanzania Ltd which paid a handsome Sh97bn/-. Tulawaka gold mine, owned by African Barrick Gold, came third and paid Sh77.4bn/- during the same period.
Althhough African Barrick Gold is the largest gold producer in the country, its contribution in corporation tax remains abysmal because the company continues to declare losses at its North Mara, Bulyanhulu and Buzwagi mines.
Data from the Bank of Tanzania – eliably obtained by the Guardian -- show that in 2009 Tanzania’s gold exports rose to $1.076 billion in 2009, up from $932.4 million in 2008 when gold prices per troy ounce reached $972million.
In 2010, the value of gold exports rose by 31 percent, reaching $1.365 billion, thanks to world’s gold prices that reached $1,112 per troy ounce.
Data from the Tanzania Central Bank further shows that in 2011 gold exports rose by 47 percent, reaching $2.226bn/-, when the price per troy ounce also rose to a record $1,568.
In 2012, gold exports rose to $2.300bn as the price per troy ounce surged to $1,700.
Over the same period, production cost per ounce ranged between $650 and $890 per ounce -- depending on the type of the mine as well as the ore grade available.
But the gold prices ironically surged, raising the value of Tanzania’s
export earnings, but the country’s corporation tax remained
unconvincing.
According to the TMAA, major gold mines paid fuel levy amounting to $2m, which wasn’t paid up to 2010. These mines, according to TMAA, also paid withholding tax amounting to $3m over the past four years, and another $1.5m in government levy.
At the previous rate of 3 per cent in royalties, it means the government has earned a total of $17.417 million over the past four years in royalties from gold earnings of $6.967 billion.
Royalties are calculated on gross earnings regardless whether the mine has posted profit or not.
Over the past four years, gold exports reached a record $6.967bn, during which the Tanzanian government earned an estimated $303m, casting doubt on whether the country was getting what it deserves even after replacing the 1997 Mining Act with the 2010 Act.
Meanwhile, TMAA has confiscated various types of minerals that were in the process of being smuggled out of the country, all worth Sh13.17bn.
Speaking to reporters in Dar es Salaam yesterday, TMAA Director of Finance and Administration Bruno Mteta said the minerals had been impounded from foreigners and locals within the past ten months, indicating Tanzania could be losing billions of cash in smuggled minerals.
The TMAA is a semi-autonomous institution established by Government Notice No. 362 of November 6, 2009 under the Executive Agencies Act, Cap. 245 – and took over the functions of the Minerals Auditing Section in the Minerals Department under the Ministry of Energy and Minerals.
The TMAA mission is to conduct financial and environmental audits as well as auditing the quality and quantity of minerals produced and exported by miners to maximize government revenue.
According to the TMAA, major gold mines paid fuel levy amounting to $2m, which wasn’t paid up to 2010. These mines, according to TMAA, also paid withholding tax amounting to $3m over the past four years, and another $1.5m in government levy.
At the previous rate of 3 per cent in royalties, it means the government has earned a total of $17.417 million over the past four years in royalties from gold earnings of $6.967 billion.
Royalties are calculated on gross earnings regardless whether the mine has posted profit or not.
Over the past four years, gold exports reached a record $6.967bn, during which the Tanzanian government earned an estimated $303m, casting doubt on whether the country was getting what it deserves even after replacing the 1997 Mining Act with the 2010 Act.
Meanwhile, TMAA has confiscated various types of minerals that were in the process of being smuggled out of the country, all worth Sh13.17bn.
Speaking to reporters in Dar es Salaam yesterday, TMAA Director of Finance and Administration Bruno Mteta said the minerals had been impounded from foreigners and locals within the past ten months, indicating Tanzania could be losing billions of cash in smuggled minerals.
The TMAA is a semi-autonomous institution established by Government Notice No. 362 of November 6, 2009 under the Executive Agencies Act, Cap. 245 – and took over the functions of the Minerals Auditing Section in the Minerals Department under the Ministry of Energy and Minerals.
The TMAA mission is to conduct financial and environmental audits as well as auditing the quality and quantity of minerals produced and exported by miners to maximize government revenue.
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