Magufuli orders review of mining sector taxes

23Jan 2019
Crispin Gerald
Dar es Salaam
The Guardian
Magufuli orders review of mining sector taxes

PRESIDENT John Magufuli yesterday gave a 30-day ultimatum to relevant authorities to install Closed Circuit Television (CCTV) cameras within Mirerani tanzanite mine and register all gemstone dealers in a bid to curb smuggling and boost revenue.

President John Magufuli addresses the mining sector general meeting organised by the Ministry of Mining at the Julius Nyerere International Conference Centre (JNICC) in Dar es Salaam yesterday. Photo: State House

Dr Magufuli issued this directive in Dar es Salaam when he chaired a one-day meeting aimed at seeking answers from top government officials and private sector stakeholders in the country's mining industry.

 

Yesterday’s meeting came in the wake of regulatory changes in the sector, as the government enacted a string of laws and regulations in 2017, which ushered in sweeping changes to the country's mining code. The government is seeking a bigger share of revenues from the sector.

Addressing artisanal miners packed in the conference hall, President Magufuli said construction of the wall plus installation of CCTV will ensure the gemstones pass through official channels of trade so that the government can get proper royalties and put a stop to smuggling and illegal trade of tanzanite.

The president said upon failure to implement that directive, he will take action against the minister of Minerals, his deputy and the permanent secretary.

“I want the minister, your deputy and permanent secretary in collaboration with other organs to ensure that the installation of the CCTV is done within 30 days,”he said.

 

President Magufuli expressed sadness that the gemstone which is not found anywhere else except Tanzania had benefited foreign individuals and foreign countries more, while people in Manyara remain poor.

 

He said it was high time for Tanzanians to benefit from its natural resources, which have been plundered for a long time by foreigners while leaving citizens in abject poverty.

 

Magufuli also tasked the relevant authorities in collaboration with Tanzania Revenue Authority (TRA) to register all gemstone dealers and issue them with identity cards.

 

He hinted that the process of registering gemstone dealers is aimed at curbing smuggling whereas doing  so will boost revenues to the public coffers.

In another development, Dr Magufuli directed the ministers responsible for mining and finance, the Commissioner for Mining, the Tanzania Revenue Authority (TRA) and geologists to sit and restructure the relevant taxes in order to provide relief to miners from taxes imposed on the sector.

 

He said multiple taxes is the main reason  for small and medium miners in the country to engage in illegal business and tax evasion as well as shifting the minerals they produce to sell across borders illegally.

 

The president observed that miners are subjected to about six taxes including the royalty of six percent, municipal levy of 0.3 percent, withholding tax of five percent, inspection and clearance fee one percent and 18 percent VAT.

 

He emphasized that there was no need of having so many taxes in one sector, directing that the top officials examine possible ways of amending the tax schedule to give relief to miners.

 

“It is better to have low taxes that will provide room for collection of more taxes instead of imposing high taxes that do not facilitate revenue collection,” he declared.

 

Presenting his grievances, a Geita-based small gold miner, Solomon Mihayo appealed to the government to take strong and extensive measures against gold smuggling in the country.

 

On September 21 last year, the president directed the Tanzania People’s Defence Forces (TPDF) through the National Service Department, to build a wall around tanzanite blocks A to D at the Mirerani mines and install high-tech equipment to monitor mining activities, so that the government earns appropriate levels of revenue.

 

Dr Magufuli also directed that trading in tanzanite gemstone should now be conducted in Simanjiro only in order to promote trade and development in the area.

 

 

 

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