Small scale miners seeking tax waivers

Small scale miners have requested President John Magufuli to waive some taxes that they described as a ‘nuisance’ that impede the mining business in the country. 

In a swift response, the Head of State directed the Minister of Minerals, Dotto Biteko and his Finance and Planning counterpart, Dr Philip Mpango, to look into how best to make amendments in the tax legislation to waive the taxes.

The miners also called for establishment of a mineral bank as well as introduction of a certificate to recognise Tanzanite minerals as constituting a uniquely Tanzanian product.

They were speaking at the Julius Nyerere Convention Centre (JNCC) during a meeting between Dr Magufuli and artisanal miners to discuss the challenges facing the mining sector and propose immediate solutions for them.

The president of the Union of small scale miners, John Bina, told the President that many mineral dealers were evading tax because of an endless list of taxes that was a stumbling block in doing business.

His colleague, one Solomon Hiare from Geita, said smuggling of minerals outside the country of over 95 per cent was prompted by the 18 per cent Value Added Tax imposed on miners as well as 5 per cent withholding tax.

At the meeting that was chaired by Dr Magufuli, the businessman proposed that the two taxes be waived to smoothly facilitate mining business in the country.

According to him, apart from 5 per cent and 18 per cent imposed by Tanzania Revenue Authority (TRA) and the ministry of minerals on withholding tax and VAT respectively, miners were burdened by another luggage in the form of service levy (0.3per cent), loyalty (60per cent) and inspection clearance fee (1per cent).

“The Ministry of Minerals as well as Finance and Planning should sit down and chart out a proper strategy that will see mineral dealers pay little tax but get many buyers so as to maximise tax revenue at the end,’’ said Dr Magufuli. 

Dr Magufuli further tasked TRA Commissioner General Charles Kicheere to explore the possibilities of looking into how best to make amendments on various taxes, to help miners conduct business without problems. 

In his response, Mr Kicheere said they were in the process of amending the law without naming when the process would be accomplished, a move that prompted the President to ask Finance and Planning Minister Mpango to offer more clarification on the matter. 

Responding, Dr Mpango hinted that when preparing the next budget, his ministry would consider the best way to handle the tax matter. He was seconded by his counterpart in the Ministry of Justice and Constitutional Affairs, Professor Palamagamba Kabudi, who pledged that all areas that needed immediate legislative amendments would be worked on immediately.

Tanzania Private Sectors Foundation (TPSF) Executive Director Godfrey Simbeye said as the country struggled to amend the tax legislation, his organisation was currently collecting views from stakeholders and that they would submit the schedules of amendment to the parliamentary committee. 

On the establishment of a mineral bank, mining businesspeople said if they had such an institution, it was easier for them to easily access loans. They also requested the Bank of Tanzania (BoT) to think on buying gold as part of its reserve.

Responding, the Deputy Governor, Dr Bernard Kibese, said BoT was, in collaboration with the ministry of minerals, contemplating on the establishment of storage and warehousing after suspending gold purchases in the previous years after realising that they were at some point purchasing counterfeit gold. 

“As BoT we are ready to establish these centres in purchasing reserve gold but we will make sure that we buy gold that is well refined to avoid falling in another trap of counterfeits as it happened before,’’ said the deputy governor. 

According to him, BoT was keeping reserve through currencies in terms of dollars and minerals, and so, the miners; proposal was welcome. 

Regarding the originality of Tanzanite minerals, the miners suggested that there should be a certificate of origin to exporters so that the country can earn worldwide recognition as the producer of Tanzanite.