Post by Sapphire Capital on Jul 22, 2008 2:01:21 GMT 4
Time for multinational mining companies to pay real taxes
July 21, 2008
FINNIGAN WA SIMBEYE
DAR ES SALAAM
LAST week a high-level Canadian delegation led by High Commissioner Janet Siddall visited Parliament apparently to lobby lawmakers on delaying or altogether rejecting some of the most constructive proposals made by a presidential mining sector review committee.
The Canadians, whose companies own the bulk of this country’s gold mining sector, are concerned that the sweeping proposals which include an increase in royalty, taxes and ownership of the projects will erode their benefits.
Two Canadian companies, Barrick Gold Corporation and Tanzania Royalty Exploration Corporation (TRE), arguably control over 50 per cent of the country’s gold projects and claim titles vast mineral rich area of Lake Victoria gold belt.
Barrick owns three of the seven major gold mining projects in the country while TRE controls over 60 per cent of mining rights in mineral rich Lake Victoria greenbelt. The two companies are among foreign corporations which have made windfall profit out of the over $2bn earned in gold exports in the past decade when tax exemptions were rife.
During the period, the mining companies paid $250m to our country which we happily refer to as poor, a least developed country and LDC status stands tall in areas adjacent to foreign owned mining projects.
Tanzanians have always referred to the Canadians as donors while their companies are referred to as important foreign investors. Barrick and TRE pay taxes worth millions of dollars annually to Ottawa while Tanzania is left with peanuts.
So here are the Canadians lobbying our legislators to see the report of the Mark Bomani led mining committee their way.
The Canadians want us to continue calling them as donors while receiving what Barrick and TRE have paid as taxes to Ottawa while not doing the same to Dar es Salaam. And some of our members of parliament think that is fine. It?s simply economic diplomacy, period! However, a situation that is meant to keep our country as a beggar is not very palatable.
I can imagine our ambassador to Saudi Arabia lobbying Saudi MPs to lower the price of oil for our country. The Saudis, because they are wise, will simply ignore whoever that envoy is and cash on spiralling oil prices which will earn them extra income to finance infrastructure development, pay civil servants better salaries and boost health and education budgets.
The Bomani committee report is a good opportunity for this country to ensure that foreign mining corporations which have made a staggering fortune out of our mineral deposits start paying back to the people of this country.
We cannot continue to be a country whose development budget is financed by net aid while allowing multinational corporations to make super profits from our mineral resources.
TRE's Chief Executive and Chairman, James Sinclair, is predicting that an ounce of gold may soon hover around $1,000 which is good for the investor and certainly should be good for those unfortunate Tanzanians who are bearing the brunt of gold mining activities at Geita, Bulyanhulu, Mirerani and elsewhere.
Our legislators must simply listen to concerns by the Canadians and other foreigners, but ultimately act in favour of national interest by implementing the Bomani mining committee recommendations as swiftly as possible.
July 21, 2008
FINNIGAN WA SIMBEYE
DAR ES SALAAM
LAST week a high-level Canadian delegation led by High Commissioner Janet Siddall visited Parliament apparently to lobby lawmakers on delaying or altogether rejecting some of the most constructive proposals made by a presidential mining sector review committee.
The Canadians, whose companies own the bulk of this country’s gold mining sector, are concerned that the sweeping proposals which include an increase in royalty, taxes and ownership of the projects will erode their benefits.
Two Canadian companies, Barrick Gold Corporation and Tanzania Royalty Exploration Corporation (TRE), arguably control over 50 per cent of the country’s gold projects and claim titles vast mineral rich area of Lake Victoria gold belt.
Barrick owns three of the seven major gold mining projects in the country while TRE controls over 60 per cent of mining rights in mineral rich Lake Victoria greenbelt. The two companies are among foreign corporations which have made windfall profit out of the over $2bn earned in gold exports in the past decade when tax exemptions were rife.
During the period, the mining companies paid $250m to our country which we happily refer to as poor, a least developed country and LDC status stands tall in areas adjacent to foreign owned mining projects.
Tanzanians have always referred to the Canadians as donors while their companies are referred to as important foreign investors. Barrick and TRE pay taxes worth millions of dollars annually to Ottawa while Tanzania is left with peanuts.
So here are the Canadians lobbying our legislators to see the report of the Mark Bomani led mining committee their way.
The Canadians want us to continue calling them as donors while receiving what Barrick and TRE have paid as taxes to Ottawa while not doing the same to Dar es Salaam. And some of our members of parliament think that is fine. It?s simply economic diplomacy, period! However, a situation that is meant to keep our country as a beggar is not very palatable.
I can imagine our ambassador to Saudi Arabia lobbying Saudi MPs to lower the price of oil for our country. The Saudis, because they are wise, will simply ignore whoever that envoy is and cash on spiralling oil prices which will earn them extra income to finance infrastructure development, pay civil servants better salaries and boost health and education budgets.
The Bomani committee report is a good opportunity for this country to ensure that foreign mining corporations which have made a staggering fortune out of our mineral deposits start paying back to the people of this country.
We cannot continue to be a country whose development budget is financed by net aid while allowing multinational corporations to make super profits from our mineral resources.
TRE's Chief Executive and Chairman, James Sinclair, is predicting that an ounce of gold may soon hover around $1,000 which is good for the investor and certainly should be good for those unfortunate Tanzanians who are bearing the brunt of gold mining activities at Geita, Bulyanhulu, Mirerani and elsewhere.
Our legislators must simply listen to concerns by the Canadians and other foreigners, but ultimately act in favour of national interest by implementing the Bomani mining committee recommendations as swiftly as possible.