Mining Sector Taxation in Tanzania

Tanzania introduced its first mining policy in 1996, aiming to transform the nascent industry into a robust private-led sector. The Mining Policy of 1996 and the Mining Act of 1997 laid out a 25-30-year vision that would see the sector's contribution to GDP grow from 1.5 per cent in 1996 to 10 per cent in 2025. While Tanzania has indeed seen a boom in investment in the sector, with six large gold mines being commissioned since the early 1990s, the government has failed to reap the benefits due to generous tax incentives provided under earlier mining acts. A new mining policy introduced in 2009 revised some of those incentives, however, many of the most lucrative mines are still working on contracts agreed before the revisions, which the government feels obliged to honour. This paper will trace the history of the various mining tax frameworks, look in detail at some of the factors affecting them and conclude with some suggestions as to the next steps forward.