Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions

Petro Sauti Magai & Alejandro Márquez-Velázquez (2013): Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions, Development Southern Africa, DOI:10.1080/0376835X.2013.797225

Posted: 6 Jun 2013

See all articles by Petro Magai

Petro Magai

University of Dar es Salaam

Alejandro Marquez-Velazquez

Free University of Berlin (FUB)

Date Written: May 28, 2013

Abstract

This paper analyses the factors that reduce the gold sector's contribution to the Tanzanian government's revenue. Tanzania is among Africa's largest gold exporters. Yet ordinary Tanzanians have seen little benefit from this. This is partly because the government has enacted tax laws that are, as we shall see, overly favourable to multinational mining companies, and partly because of the same companies' business practices. Critics argue that the government fails to capture a substantial amount of state revenue as a result of low royalty rates, unpaid corporate taxes and tax evasion by major gold mine operators. This paper argues that the Tanzanian government should try to increase its share of revenues by taxation based on revenues, increasing its auditing skills and its involvement in mining, as well as by increasing the transparency of contracts and limiting the discretionary power of policy-makers in negotiating contracts.

Keywords: gold, impacts, taxation, revenue, Tanzania

JEL Classification: L72, N57, O13, Q38

Suggested Citation

Magai, Petro and Marquez-Velazquez, Alejandro, Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions (May 28, 2013). Petro Sauti Magai & Alejandro Márquez-Velázquez (2013): Taxation in the Tanzanian Gold Sector: Overview of Impacts and Possible Solutions, Development Southern Africa, DOI:10.1080/0376835X.2013.797225. Available at SSRN: https://ssrn.com/abstract=2273972

Petro Magai (Contact Author)

University of Dar es Salaam ( email )

P.O. Box 35046
Dar es Salaam
Tanzania

Alejandro Marquez-Velazquez

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

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