Tanzania plans amendments to Mining Act to curb smuggling and fatalities

Dar es Salaam. Tanzania is preparing amendments to the Mining Act to tackle ongoing challenges of mineral smuggling and fatalities in the country's mines, a senior official has said.

The Deputy Permanent Secretary in the Ministry of Minerals, Mr Masafiri Mbibo said recently that the amendments would particularly seek to protect Tanzania's wealth in minerals, particularly gold.

Gold constitutes a significant portion of the country's exports, generating over a billion US dollars annually, followed closely by diamonds.

"The proposed amendments aim to empower the Minister responsible for minerals with the authority to set tax rates, initially proposed at 20 percent for mineral producers," said Mr Mbibo.

The measure, he said, was intended to address persistent issues in the mining sector, where miners and traders often cite high taxes as a reason for non-compliance with legal procedures.

Mbibo also acknowledged concerns raised by some miners and traders about gold smuggling, noting that Tanzania's reputation for integrity could be compromised if proper measures are not enforced.

"In response to concerns over high taxes, the government reduced the tax rate on gold from four percent to two percent last year to stimulate legal trading," Mbibo added.

Under the proposed amendments, small-scale miners would pay a tax rate totaling 6.3 percent during harvesting, while transporters would face a 9.3 percent levy covering taxes and related expenses.

Mr Mbibo defended the tax rates, asserting that even the reduced two percent tax was recommended by small-scale miners through their associations.

The chief projects coordinator at SwissAid, Ms Alice Swai, raised concerns about informal gold transportation leading to discrepancies in information provided by small-scale miners, which hinders their inclusion in Tanzania's Extractive Industries Transparency Initiative (TEITI) annual financial reports.

"To address these challenges, there is a need for agreements among countries involved in mineral reception, processing, and trading to establish a unified system for tracking mineral supply chains," Swai suggested.

She stressed the importance of streamlining the export process for minerals and simplifying declarations to combat individual attempts to transport small quantities of gold via bags and flights.

Swai referenced recommendations endorsed at the International Conference on the Great Lakes Region (ICGLR) initiative in Khartoum, Sudan, in September 2021 as a framework for enhancing regional cooperation in mineral governance.