In Tanzania the planning commission is considering introducing a super profit tax in the mining sector which would be similar to Australia’s resource rent tax. The country is amongst the top three gold producing nations in Africa.
As per the planning commission the windfall earnings in the mineral sector would yield good revenue for the government. The gold exports in Tanzania have gone up to $1.5 billion over the last 5 years, but the government is still receiving just $100 million as its annual revenue from sales of gold.
Companies which operate in Tanzania include AngloGold Ashanti, African Barrick Gold and Tanzanite One. These miners may face the new tax within five years if the planning commission is successful in its agenda of adding an economic growth rate of 8% over the next five years using the tax money.
The plan of the commission is to increase the tax revenue as a percentage of the gross domestic product from its current 15% to a higher 19%. The news has already sent African Barrick Gold’s share prices tumbling in London after trading. It is the largest gold producing company in Tanzania and is likely to the be the most hit by the new mining tax.