Govt decides to own shares in mining

In a move that may see the people of Tanzania take more control of their country’s natural resources, the government has issued a categorical statement that it will own shares in new mining and gas and oil ventures.
Prof Sospeter Muhongo, the minister for Energy and Minerals, told the National Assembly yesterday that the decision of the government to own shares in new mining firms will ensure transparency and increase control over revenues generated.
Prof Muhongo was responding to a question by Bariadi MP John Cheyo who had advised the government to halt mining activities because the sector was not benefiting ordinary Tanzanians. He cited Mwadui Mine in Shinyanga where citizens live in abject poverty after years of diamond mining.
“It will not make sense to stop companies that have shown interest to invest in the mining sector because the government needs revenue to finance development projects,” said the minister in response.
Instead, he said, the government was already taking measures to ensure efficient mechanisms to supervise and monitor revenue collections from the companies are in place.
The measures, he said, have so far ensured that 30 per cent of corporate tax, three to 15 per cent of withholding tax and 0.3 per cent from service levy of their turnovers are duly paid to the relevant authorities.
“A share-holding arrangement between an investor in mining with the government is going to be compulsory,” emphasized the minister, adding: “This will also involve oil and gas companies operating in the country.”
The move has come amid growing concerns that the country has, for decades, not benefited from the lucrative mining sector, despite having a number of multinational companies operating in it.
In another development, the government has formed a task-force to investigate a mining company, Petra Diamond, over allegations of not paying corporate tax and forcing its sub-contractor to pay service levies to the relevant authorities.
This was revealed by the deputy minister for Energy and Minerals, Mr Steven Masele, when responding to a claim on Mwadui Mine by Kishapu legislator Masoud Nchambi.
The lawmaker had asked the Parliamentary Energy and Minerals Committee to visit the mine and ascertain why it had not benefited Kishapu residents ever since its establishment in 1948.
In his response, deputy minister Masele said the mining project has benefited the country through payment of taxes and creation of jobs.
Source: The Citizen, reported from Dodoma
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