11 June 2012

Tanzania: 419bn/ - Reaped From Extraction

THE government received revenue totalling 419bn/- between July 2009 and June 2010 from companies in the extractive industry, a new report has showed.

The second Tanzania Extractive Industries Transparency Initiative (TEITI) report on reconciliation of payments made by extractive companies and government revenue has showed, however, that there was a discrepancy of 5bn/-.

"The report also shows that the government had received 419bn/- whereas mining and gas companies made payments of 424bn/-," said a press statement by the Chairman of TEITI multi-stakeholders working group, Mr Mark Bomani. The report also reveals that the government acknowledged to have received 44bn/-.

"The discrepancies are mainly due to failure by two companies to file reports. These are Tanzania Portland Cement Company (which represents 7 per cent of government revenues in the extractive sector) and Mineral Extractions Technologies Limited.

"There are also discrepancies on import duty involving TRA (Tanzania Revenue Authority) and Geita Gold Mine," Mr Bomani said in the statement issued on Sunday. Mining accounts for 80 per cent of revenues in the extractive industry while oil and gas represent 20 per cent of revenue in the industry.

The first report that covered July 2008 and June 2009, shows that the government was reported to have received 128.4bn/- while companies in the sector had showed payments amounting to 174.9bn/-, resulting in a disparity of 46.5bn/-.

"After the Controller and Auditor General (CAG) investigated the discrepancy, it was reduced to 2bn/-," the statement said, without giving more details. The increase in revenue, according to the statement, is partly due to an increase in the number of companies included in the second report as well as familiarity with the reporting procedure.

Tanzania joined EITI in 2009 and shortly afterwards formed a tripartite multi-stakeholders working group to lead the process. The country is now an EITI candidate nation which is a preliminary state of membership. The initiative seeks to ensure that all revenues and payments to the government by mining and gas companies are independently audited every year in order to promote transparency and check mismanagement and abuse.

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