Tanzania generates over $174m in taxes by directly auditing mining companies

Tanzania has been able to generate $174.9 million in taxes from two mining companies by doing direct audit of the companies. The taxes were generated within two years, an official has said.

In a presentation on Tanzania’s tax adminstraton system at a two-day workshop on Improving Mining Taxation Administration in West Africa in Accra, Friday September 14, 2012, Mr. Venance B. Mwasse, Manager, Tax Audit and Review of the Tanzania Mine Audit Agency (TMAA), said despite the challenges facing the Agency, the direct auditing of the mining companies in the country is yielding returns.

The TMAA he explained, performs mineral physical audits by systematically verifying, inspecting, observing and witnessing mining companies’ operations with regard to declarations and records so as to assess its compliance to applicable laws, regulations and standards.

Among others, the TMAA also confirms and records daily minerals production reports; Verifies and confirms daily minerals shipment/exports; Analyzes and  confirms quantity and quality of  mineral products before export; Confirms mines’ provisional royalty computation schedules based on TMAA’s assay results; Confirms payment of provisional royalty before export; Obtains final outturn report from the refiner/buyer and computes payable final royalty (Royalty Reconciliation).

He said Tanzania generated $174.9  million in taxes in two years from two mining companies  and more royalty payments are being  realised.

“For the year 1998 to 2011 total amount paid is $292.5 million,” he said.

Mr. Mwasse told the workshop that the auditors capture both the quality and quantity of the minerals at the mines before export. Based on the data and information collected upfront at the mines, Tanzania has been able to determine what the mining companies are exporting out of the country.

This has also “minimized public outcry,” he said.

The workshop was organised by the Word Bank is to look at ways to improve mining tax administration in West Africa. Some of the countries represented also shared country best practices.

The main minerals that are mined in Tanzania are gold and diamond.

By Emmanuel K. Dogbevi