Tanzaniaâ€™s Mining Sector and Its Implications for the Countryâ€™s Development
This paper analyses the factors that reduce the mineral sectorâ€™s contribution to the Tanzanian governmentâ€™s revenue. This sector accounts for nearly half of the countryâ€™s exports and places it among Africaâ€™s largest exporters. Yet, ordinary Tanzanians have seen little benefit from their countryâ€™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.
|Date of creation:||Aug 2011|
|Date of revision:|
|Publication status:||Published in Berlin Working Papers on Money, Finance, Trade and Development, August 2011|
|Contact details of provider:|| Web page: http://finance-and-trade.htw-berlin.de|
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- Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-48, December.
- Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
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