Thursday, 22nd December 2005 (3170 views)

The Tanzanian government has announced plans to levy more tax on the rapidly burgeoning local gold mining sector.

Talking to Dow Jones Newswires, Tanzanian minister Daniel Yona said the government may hoist mining royalty rates or levy additional charges in response to market growth and soaring gold prices.

"We need to sit down with these companies and see if there are ways we can improve the sharing of the cake without scaring them away," said Mr Yona.

Some mining outfits have threatened to pull investment from the country in response, although the government believes rising gold prices justify the move.

The price of gold recently broke through the $500 an ounce barrier for the first time since 1987 and has doubled in value in the last five years.

With Tanzanian gold exports now standing at $700 million annually, the government thinks it is time for mining companies to give more to the public coffers.

The government's goal is to hike mining revenues to ten per cent of GDP by 2025, up from the current three per cent.

Tanzania is among a string of sub-Saharan states to have seen gold production mushroom since opening their economies to foreign investment in the late 1990s.

 

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