"By The Citizen Reporter and Agencies Dar es Salaam. The government spared mining firms from addition taxes, despite widely circulated reports that a ?super-profit? tax was to be introduced to benefit from skyrocketing gold prices.
Share trading of African Barrick Gold fell the most in more than seven months, this week, at the London Stock Exchange over fears that Tanzania was going to set the tax similar to a levy proposed in Australia.
However, the 2011/12 fiscal plan tabled by the Finance minister Mustafa Mkulo on Wednesday did not touch mining taxes.The budget, considered by many to be crafted to boost economic growth and investments, offered more concessions tospeed
the business community and took measures to speed up tax refunds on miners? oil imports.?A special account (escrow account) would be created by the Tanzania Revenue Authority and miners would be required to draw their estimated annual petroleum consumption plans and deposit money on the account equal to the estimated taxes on petroleum products consumed in a given month. This measure is intended to remove the bottlenecks faced by mining companies due to delays in tax refunds,? Mr Mkulo said.
Before the tabling of the budget on Wednesday ABG?s stock slumped as much as 10 per cent to 404.1 pence. This was considered the biggest decline since last October when AngloGold Ashanti?s, which also mines in Tanzania, dropped as much as two per cent in Johannesburg.
African Barrick operates four mines in the country that account for all of its gold production, while AngloGold runs the Geita mine. Tanzania is the joint third-largest gold producer in Africa behind South Africa and Ghana, matching Mali?s 44.6 metric tonnes in 2010, according to research company GFMS Ltd.
Expectations were that royalty payments would have doubled from three per cent to six per cent or tax rising from 30 per cent to 40 per cent, according to experts.
In fact the increase was proposed in a five-year planning report that targets an annual average economic growth rate of eight per cent from 2011-12 to 2015-16, by the Planning Commission. Australia, whose economy depends heavily on mining, has already a ?super-profit? tax in place.
Its planned 30 per cent tax on iron ore and coal profits will earn A$7.7 billion ($8.2 billion) in its first two years, the country?s Treasury Department said last month."
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