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Tanzania To Remove Tax Breaks For Mining Cos From July 1 -Min |
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| Friday June 13rd, 2008 / 16h36 |
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DOW JONES NEWSWIRES
The Tanzanian government plans to remove tax exemptions from the mining sector from July 1 as part of a wide-ranging review of tax legislation aimed at increasing government revenues, Tanzania's finance and economic affairs minister said in a budget report Thursday.
However, as the incentives are statutory, the proposals will need to be approved by parliament before they are introduced.
"The analysis has revealed that all exemptions are statutory, and provided for in the legislation," Mustafa Haidi Mkulo said in the report. "A significant part of the exemptions are to investors in the mining sector."
Mining companies operating in Tanzania have been enjoying a wide range of incentives and tax breaks, attracting up to $2.5 billion of investment in the sector since 1998, making Tanzania the third leading gold producer in Africa after Ghana and South Africa .
However, with the recovery of gold prices on the world market, the government has been looking at ways to reduce incentives and benefit more from the sector. Last year, President Jakaya Mrisho Kikwete appointed a panel to review mining contracts, which recommended that taxes in the sector be increased and incentives reviewed.
Mkulo said Tanzania will also amend a number of laws on value added tax, excise tax and income tax, with the aim of increasing revenues.
Razia Khan, the regional head of research at U.K.-based Standard Chartered Bank, said Wednesday that the anticipated new tax proposals for Tanzania's mining sector will be moderate.
"Unlike the case in Zambia, however, where the imposition of a windfall tax on copper mining has been a key driver in currency strength, we expect measures included in the Tanzanian budget to be more moderate," she said in a report.
A company official with AngoloGold Ashanti Ltd (AU), owners of Geita Gold Mine in Tanzania told Dow Jones Newswires Friday that the company would comment after studying the proposals. Other companies operating the the sector could not be reached for an immediate comment.
Other companies operating in Tanzania 's gold mining sector include Barrick Gold Corp.(ABX), the world's leading producer and Austrlia-based Resolute Mining Ltd (RSG.AU).
-By Nicholas Bariyo, contributing to Dow Jones Newswires; 256-75262 4615; bariyonic@yahoo.co.uk
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| Friday June 13rd, 2008 / 16h36 |
Source : Dowjones Business News |
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