The Tanzanian parliament has approved a five year development plan which includes an Australian inspired super-profit tax for the mining industry. The $27.4 billion development plan hopes to earn revenue from the mineral resources of the nation.
Stephen Wassira, Minister of State in the President’s office in charge of social relations and coordination confirmed as much and said that implementation is yet to begin. However Mr Wassira made no statement that said that the mining tax would be levied right away.
In fact the Mines Minister William Ngeleja referred questions on the tax to Finance Minister Mustafa Mkulo, who reiterated in a text message that there was no super-profit tax in his budget for 2011-12. Mining companies are currently hoping that the current financial year will not see the new tax levied.
The national Assembly Speaker Anne Makinda said that the government’s five year development plan had been approved by a majority of votes by the members of the Tanzanian parliament. Rising commodity prices have been cited as the justification of the tax but no Tanzanian minister has been able to specify details of the tax as yet.
Some fears of AngloGold Ashanti have been elevated when it came to be known that Tanzania would not be imposing the tax on old companies. So the Geita mine operated by AngloGold Ashanti would not be affected as it has an agreement valid for the life of the mine. New mining companies coming into to invest in Tanzania may not be quite so lucky.
Tanzania has a great potential particularly for gold, base metals, diamonds, ferrous minerals and a wide variety of gemstones, some of, which are unique such as tanzanites. Coal, uranium, and various industrial minerals such as soda, kaolin, tin, gypsum, phosphate and dimension stones are available at an attractive economic rates.