Tanzanian President John Magufuli. FILE PHOTO | NMG
Tanzania's President John Magufuli has
ordered a special audit of mining companies to determine if they pay
their fair share of taxes to the East African country.
Mining
contributes 3.5 per cent of the gross domestic product (GDP) in
Tanzania, Africa's fourth-largest gold producer, but the government
wants the sector to pay more taxes.
The order for an audit follows an abrupt ban on exports of gold and copper concentrates.
"The
government wants to verify if the relevant taxes are actually being
paid," Tanzanian Prime Minister Kassim Majaliwa said in a statement late
on Tuesday.
Since coming to power in November 2015,
Magufuli has promised to root out tax evasion, corruption and
mismanagement, but some foreign investors have been rattled by his
policies.
Tanzania's biggest mining firm, Acacia
Mining, is in talks with the government after being hit hard by the ban
on exports, with the miner saying it is incurring a daily loss of $1
million due to the stoppage.
Magufuli has also ordered
hundreds of export-bound shipping containers of mineral concentrate to
be placed under 24-hour police watch until a thorough inspection was
done to verify if the cargo was properly declared.
A video recording of the president making an
unannounced visit to the Dar es Salaam port on March 23 to personally
inspect containers of mineral concentrate showed a vividly angry
Magufuli talking to port workers.
The president said he
has instructed officials to impound over 250 shipping containers of
gold and copper concentrate owned by Acacia Mining at Dar es Salaam
pending a tax probe.
He disputed claims by companies which say they cannot build furnaces to smelt copper locally.
"The (mineral) separation method is very simple chemistry," said Magufuli, who holds a PhD in chemistry.
Acacia
said it pays all local taxes on its gold and copper concentrate before
exporting the shipment and follows all government procedure.
"The
concentrate revenue is also included in our royalty payment
declarations and income tax returns to the TRA (Tanzania Revenue
Authority)," it said in a statement on Tuesday.
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