Relief for Tanzania’s artisanal miners as govt comes down hard on the big boy
The reforms in Tanzania’s mining sector have come as a boon for the small-scale miners, as the government has set its sights on multinational firms, on whom it has placed a heavier tax burden.
The changes seem to have spared artisanal miners as the government seeks more revenue from the big players to raise the sector’s contribution to GDP from 4.8 per cent to 10 per cent by 2025.
Section 55b (i) of the Mining Act states, “Supply of precious metals, gemstones and other precious stones by a small-scale miner at the buying station designated by the Mining Commission under the Mining Act or at the Mineral and Gem House shall be zero-rated.”
John Bina, president of the Federation of Miners Association of Tanzania said that the zero-rating on their supplies “will ease a heavy burden of taxes that miners were forced to shoulder.”
They also called for a reduction of tariffs and other charges, saying it would not only promote small-scale miners but also minimise instances of tax evasion and smuggling, which have become rampant.
In 2016, the president ordered withdrawal of licences for the country’s two biggest mining companies, Barrick Gold Corp and London-listed Glencore Plc, from the gold-rich areas in northwestern Tanzania to allow more that 5,000 small-scale miners to gain access to the fields.
The president has maintained that for years, Tanzanians have not been benefiting from the country’s natural resources, especially minerals, because of dubious investors supported by corrupt officials.
The government has announced that it will set up mineral buying stations by April, to make it easy to control the trade in minerals and ensure that dealers pay the stipulated taxes due to the government.
If the investment is less than $100,000 or its equivalent in Tanzanian shillings, it is referred to as a small-scale mine and needs a primary mining licence from the Zonal Mines Officer.
In the effort to clean up the sector, Minister for Minerals Dotto Biteko has instructed 18,341 mining licence holders to pay up or risk losing their licences.
Mining firms and individuals owe the government close to $50 million, including $26 million for prospecting, $12 million for mining, and $8 million for the primary mining licences.
“We pledged to empower small-scale miners, revoked licences for firms and individuals who breached the law and identified more special areas for small-scale miners. However, we found big foreign companies have also been issued licences to special areas allocated to Tanzanians,” Mr Biteko added.