GOVERNMENT earnings from the extractive industry surged from 956 billion/- in 2013 to 1.221 trillion/- during the fiscal year 2014, according to findings of a report by the Tanzania Extractive Industries Transparency Initiative (TEITI).
In a quick reproach though, the Chairman
of TEITI, Judge (Rtd) Mark Bomani, noted with concern that the country
could earn more from the lucrative industries if the government had
implemented recommendations by the presidential commission which he
chaired in 2008.
“We had proposed among others that the
royalty paid by mining companies should be increased from 3 to five per
cent but the government reluctantly settled for 4 per cent of gross
revenues rather than net profits as previously pegged.
“The commission recommended as well that
the companies should repatriate to Tanzania 60 per cent of their
earnings but this has not been implemented at the expense of dwindling
value of the local currency,” Judge Bomani stressed.
The senior citizen made the remarks in
Dar es Salaam yesterday during the launch of two TEITI reports for
2012/2013 and 2013/2014 in which he also announced his decision to
retire as TEITI Chairman after seven years at the helm of the
initiative.
“But since available reports indicate
that we have only mined 20 per cent of known reserves of minerals, it is
high time we learned to make best use of the remaining 80 per cent,” he
explained.
Judge Bomani proposed as well that the
TEITI scope should be expanded to cover middle and small-scale miners to
boost government revenues from the mining sector. Tanzania joined the
Extractive Industries Transparency Initiative (EITI) in 2009 following
recommendations by the Bomani-led commission in 2008.
The commission was formed by President
Jakaya Kikwete as the country sought to improve revenues and
transparency in the mining sector. During the first TEITI report in
2009, government earnings stood at just 128bn/- with a discrepancy 30m
US dollars (about 65.4bn/-).
The disparity rose during reconciliation
of the payments in which the companies reported to have paid more than
what the government admitted to have received. “The good news is that
the disparity has now been reduced to 6bn/- during the year 2014.
The 30 million US-dollar discrepancy in
2009 astonished us,” Judge Bomani remarked. Speaking at the same
occasion, former Controller and Auditor General (CAG), Mr Ludovick
Utouh, said Tanzania could earn more revenue from the mining sector
through direct ownership and development of resources. “Personally, I
think we are using a wrong approach in managing our resources.
The only way we can increase revenues is
through direct ownership as the case is in Botswana where they invite
investors with capital and technology but share revenues,” he stated.
On the other hand, Mr Utouh showered
praise on President John Magufuli for taking action against corrupt
civil servants based on former audit reports prepared by the National
Audit Office of Tanzania (NAOT).
The Reconciliation Team Leader for the
TEITI report, Mr Juvinal Betambira of BDO East Africa, said a total of
59 companies were surveyed in 2014, including 38 mining companies in
addition to 21 companies in the oil and natural gas industry.
“During the 2013 fiscal year, a total of
65 companies, 46 mining firms and 19 companies in the oil and natural
gas reported their payments,” Mr Betambira noted. He said the earnings
for 2014 surged due to among others payment of 300bn/- in corporate tax
by Ophir after the company sold some of its stake
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