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Tanzania’s Mining Sector and Its Implications for the Country’s Development

Petro S Magai and Alejandro Márquez-Velázquez
Authors registered in the RePEc Author Service: Alejandro Márquez-Velázquez

No 1104, Competence Centre on Money, Trade, Finance and Development from Hochschule fuer Technik und Wirtschaft, Berlin

Abstract: This paper analyses the factors that reduce the mineral sector’s contribution to the Tanzanian government’s revenue. This sector accounts for nearly half of the country’s exports and places it among Africa’s largest exporters. Yet, ordinary Tanzanians have seen little benefit from their country’s exports boom. This is partly because the government has enacted tax laws that are, as we shall see, overly favorable to multinational mining companies, and partially due to the business practices of the companies themselves. The situation is further exacerbated by these companies avoiding taxes altogether by claiming losses. Nonetheless, they continue to invest in operations. 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 major gold mine operators. This paper argues that the Tanzanian government should increase its involvement in the mining industry by entering into joint ventures with mining companies, or by increasing its shares in them. Its involvement will result in an increase in tax and royalties collection.

Keywords: working paper; daadpartnership; finance-and-trade (search for similar items in EconPapers)
JEL-codes: L72 N57 O13 Q38 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-08
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Published in Berlin Working Papers on Money, Finance, Trade and Development, August 2011

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Persistent link: https://EconPapers.repec.org/RePEc:mtf:wpaper:1104

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