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The objective of the study was to examine the influence of revenue Collection from
Gold Mining Sector in Ministry of Energy and Minerals in Tanzania. Specifically the
study identified the sources of Revenue; the rate used to assess the Revenue
collection and examined the procedures used in collecting Revenue.
The research was conducted using case study design and data were analyzed by using
Statistical Package for Social Scientist (SPSS), and results were presented in
frequency distribution tables and charts. The findings revealed that revenue losses in
the Mining Sector in Africa are common to every country including Tanzania which
is one of Africa’s largest gold producers.
According to the International Monetary Fund (IMF), gold exports have risen from
around US$ 500 million to US$ 1.5 billion in the last five years due to rising gold
prices, but that government revenues have remained at around US$ 100 million per
year, due to nonpayment of corporate income tax by investors using holidays
advantage provided to mining companies by the tax laws (income tax act, 2004).
Although a new Mining Act was passed in 2010; existing gold mines remain
governed by their respective agreements signed prior to the law currently in force.
It was concluded that, Mining companies have exclusive ownership of their
operations and the minerals recovered and the power to dispose of them as they wish
including to transfer those rights to other companies without incurring capital gains
tax. Mining companies’ ability to offset against their taxable income the full costs of
their expenditure on items such as plant and machinery has lead to perpetual
declaration of tax losses, and thus non-payment of corporate income tax
It was recommended that, the government should review the mining and tax law in
order to enable the authorities concerned like the ministry of energy and minerals to
have power to asses and collect tax, royalties and other revenues from mining
companies operating in Tanzania. |
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