New audit commission to replace ‘toothless’ TMAA

FLORENCE MUGARULA in Dodoma

PARLIAMENT yesterday endorsed the bill, Written Laws (Miscellaneous Amendments) Act, 2017, that aims at enhancing control and compliance, ensuring maximum collection of revenue and securing national interests.

Debating the bill in the House, the majority of legislators concurred it was time Parliament enacted laws that stood for public interest, saying the new law would bring major changes in the entire spectrum of the country’s mining sector and that ‘wananchi’ should expect positive changes as a result.

The endorsement of the bill has brought a wide range of amendments on the Mining Act, Cap 123, the Petroleum Act, Cap.392, the Income Tax Act, Cap.332, the Value Added Tax Act, Cap 148, the Insurance Act, Cap 394 and the Tax Administration Act, Cap 438.

Among major changes that have been initiated in the approved bill include the establishment of the mining commission that shall be appointed by the President.

Establishment of the mining commission automatically dissolves Tanzania Minerals Audit Agency (TMAA), with the commission virtually ‘taking over’ all functions of TMAA.

According to the bill, the Head of State shall appoint a suit ably qualified public officer to be a Commissioner for Minerals who shall be responsible for advising the Minister on all matters relating to the mining sector.

The commission will compose nine members on which three of them including the Chairperson will be full time commissioners. According to the bill, the list of commissioners will be composed by the Permanent Secretary Treasury, the Permanent Secretary from the Ministry responsible for lands and the Permanent Secretary from the Ministry responsible for defence.

Others in the list include the Permanent Secretary from the Ministry responsible for local government, the Secretary to the Chamber of Minerals and Energy, Deputy Attorney General and two eminent persons who possess proven knowledge and experience in the mining sector.

Moreover, the power of the Minister for Energy and Minerals as well as the Commissioner for Minerals have been reduced and handed to the Mining Commission.

On the ownership of minerals and government lien, the endorsed bill gives the President on behalf of the people of Tanzania the power to control entire property in and control of all minerals in, and under or upon any land, rivers, streams, water courses throughout the country, area covered by territorial sea, continental shelf or the exclusive economic zone.

Therefore, the endorsed bill states that the government has lien over any material, substance, product or associated products extracted from the mining operations or mineral processing.

The endorsement of the bill enables the government to stop the exportation of raw minerals including mineral concentrates from mining sites. From this moment there will be no exportation of mineral concentrates and instead transportation shall apply to minerals.

Moreover, after the signing of the bill into law, mineral concentrates shall be stored in a secure yard within the mines in a manner that will be prescribed in the regulations.

The endorsed bill gives power to the government to recognize and put under its watch all mining sites. The Section aims at enabling the government to conduct survey and audit on mineral production, to be able to provide security to all mining sites and enable the government to control and identify the amount and value of minerals that is moved from the mining sites.

The endorsed bill also brings changes on the government participation in the mineral extraction activities. Section 10 (1) states that in any mining operations under a mining licence or a special mining licence the government shall have not less than 16 non-dilutable free carried interest shares in the capital of a mining company.

Upon the signing of this into law by the President, the government shall be entitled to acquire, in total, up to 50 per cent of the shares of the mining company commensurate with the total tax expenditures incurred by the government in favour of the mining company.

The bill also requires the government to establish the National Gold and Gemstone Reserve that will be under the control of the Bank of Tanzania (BoT).

The bill also requires the government to establish the mining cadastre, which receive and process applications for mining rights and mineral processing licences, administer mining rights and mineral processing licences and maintain public cadastral maps and cadastre registers.

According to the bill, corporate social responsibility shall now be a must for mining companies after the signing of the bill into a law. The Chairman of the Parliamentary committee on Constitution and Legal Affairs, Mr Omar Mchengerwa, asked the government to improve other laws to enable Tanzanians to participate fully in the development activities in various sectors.

Opposition camp spokesperson, Mr David Silinde also agreed it was time the government assessed the merits and demerits of being members of Multilateral Investment Guarantee Agency (MIGA) and Bilateral Investment Treaty (BITs).

He said in other countries, MIGA and BITs are well known as investor rights agreements, which means its existence aims at safeguarding investors’ interests.