12 June 2014

Tanzania: Talks Ongoing for Payment of U.S $7.4 Million Levy to Council

Dodoma — THE government has entered in a dialogue with African Barrick Gold (ABG) for the payment of service levy amounting to 7,406, 992.7 US dollars to Kahama Municipal Council, Deputy Minister for Energy and Minerals, Mr Charles Kitwanga, told the National Assembly.

He said the amount was arrears accumulated from 2001 when ABG started operations at Bulyanhulu and Buzwagi gold mines.

Mr Kitwanga was responding to a question by Ezekiel Maige (Msalala - CCM), who wanted to know on how the government would assist Kahama municipality get its services levy from the investor.

He also asked whether the government was ready to bring all the mining contracts in Parliament so MPs could review them and see if they really benefited Tanzanians.

Kitwanga admitted that there has been loss of revenue from mining operations, according to available contracts. He said most local councils did not receive service levy from investors, in accordance with the Local Government Finance Act of 1982.

The Deputy Minister assured the Parliament that all the investors in the mining sector shall pay the service levy and that ABG have so far started paying the levy to Kahama municipality.

He said the investor had so far paid USD 934,000. "We are negotiating with ABG to make sure that they pay the remaining amount under the Local Government Finance of 1982, whereby they are required to pay 4 per cent of the royalty to municipal councils instead of the current system where they only pay 3 per cent of their net back value," he noted.

He, however, said the government has been continuously reviewing the mining contracts since the Parliament endorsed the New Mining Act in 2010.

He said the reviewing exercise started officially in June 6th, 2010. He said the government also is negotiating with all the companies that signed the Mining Development Act (MDA).

He said that almost all the companies have 3 per cent of their net back value. Kiwanga added that MPs are allowed to see the mining contracts.

He said that all the mining contracts can be accessed by the law makers from the Energy and Minerals Ministry.

Meanwhile, Speaker of the National Assembly, Ms Anne Makinda, has noted that any legislator in need of mining contracts should officially write to the Parliamentary Clerk to request for a specific contract.

"Once you request for a specific contract, the Parliament shall be responsible to inquire about it and present it to you... we don't keep them in the office," she said.

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