Revenue paid by forestry products exploiting companies will soon start being tracked by the Tanzania Extractive Industry Transparency Initiative (TEITI), its Chairman, Justice Mark Bomani said.Justice Bomani said in Dar es Salaam this week while launching the third TEITI report which covered 30 companies mainly those extracting minerals and natural gas.
"We started with 11 companies and now we cover 30 companies, in future we will also cover the forestry sector because it is also part of the extractive industry," said Justice Bomani.
He pointed out that exploitation of forestry products by companies is a huge industry which does not contribute sufficiently to the national coffers hence the need for transparency, "We hope to include them very soon," he noted.
Several multinational companies are profiting from the exploitation of forest products such as logs and timber while others are using natural and plantation forests to export carbon credits.
These companies include the Norwegian based Green Resources SA, American Clean Action Air Corporation and state owned, Tanzania Forests Services Agency are big players in the forestry sector.
The former Chief Justice further noted that TEITI targets at doubling the number of companies covered in its annual report next year to ensure that more extracting companies are included. "Currently we only include companies with a turnover of 150m/- per annum which leaves many out," he noted.
Mining companies continue evading corporate taxes due to the backlog of losses made during the first ten years of their investment while cement companies excelled. "Only five out of 30 companies paid corporation income taxes (CIT).
These companies are Resolute Tanzania Limited, Mbeya Cement Company Limited, Tanzania Portland Cement Company Limited, Pan African Energy Tanzania Limited and Tanga Cement Company Limited. Resolute is the only gold mining company that paid CIT during this period," the 128 page report prepared by BDO East Africa in collaboration with Paulsam Geo-engineering Limited, he said.
BDO East Africa Managing Partner, Juvenal Betambira said most mining companies do not pay corporate taxes as a result of the mineral development agreements signed in 1990s. Resolute which operates Golden Pride mine in Tabora paid 37.2bn/- in corporate taxes covering the last two years of its operations.
The mine closed down last year. Overall, the report indicated that 497bn/- was paid as taxes to the government by the 30 companies out of their 3.1trn/- earning during the year ended June 2011.
In 2010, the companies earned 2.2trn/- and paid 419bn/- mostly in Pay As you Earn (PAYE), Value Added Tax (VAT) and Skills Development Levy.
Source: The Daily News, Reported by Finnigan Wa Simbeye in Dar es Salaam Tanzania
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