Publisher: 
Tanzania EITI
Publication Type: 
EITI Report
Published Date: 
July, 2017

2014-2015 Tanzania EITI Report

This EITI Report covers Tanzania's extractive sector for the financial year 2014-2015. It was published in July 2017. 

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Contents:

Executive Summary
1.0 Background
2.0: Approach And Methodology.
3.0: Extractive Sector In Tanzania
3.1 Mining Sector
3.2 Oil And Gas Sector
4.0: Beneficial Ownership.
5.0: State Participation In The Extractive Sector
5.1: State Mining Corporation
.2 Tanzania Petroleum Development Corporation
6.0 Revenue Collection
7.0 Reconciliation
7.1 Materiality
7.2 Revenue Streams
8.0 Revenue Management & Expenditure
9.0 Contribution To National Economy.
10.0 Outcomes And Impact
10.3. Discrepancies And Recommendations From The Eiti Report..
11.0: Observations And Recommendations
12.0: Conclusion
Appendix 1: List Of Prospective Mining Projects In Tanzania
Appendix 2a: Oil Blocks And Activities
Appendix 2b: Oil/Gas Blocks And Activities
Appendix 3: Background Of Extractive Companies.
Appendix 4: List Of Extractive Companies For Reconciliation
Appendix 5: List Of Extractive Companies Not Meeting The Proposed Materiality
Appendix 6: Details Of Revenue Streams
Appendix 7: Reconciliation Table For Indirect Taxes
Appendix 8: Details Of Reconciliation

OBSERVATIONS AND RECOMMENDATIONS

1 PAYMENT RESTRUCTURING OBSERVATION

Currently, TPDC receives payments from companies out of hydrocarbon allocation and pays royalty to MEM. Oil and Gas Companies pay license fees to TPDC, which in turn pays same to MEM. RECOMMENDATION Payment of petroleum benefits needs to be streamlined. Since companies already pay bonuses and directly to MEM, license fees could also be paid through similar arrangement. Secondly, if royalty paid to MEM by TPDC is ultimately intended to be paid to the National Treasury, then it is recommended that TPDC pays directly to the National Treasury.

2 UNPAID DIVIDEND BY SONGAS LIMITED OF USD 476,997

OBSERVATION Songas Ltd declared a dividend of $15million thus Government was to receive $4,350,000 representing 29% of the declared amount. Outstanding amount is $ 476,997 Source: http://www.nao.go.tz However during the year under review, Songas Limited paid dividend to TPDC amounting to USD. 3,873,003.

RECOMMENDATION

Songas Ltd should arrange to settle the outstanding dividend to TPDC.

3 CLASSIFICATION OF REVENUE STREAMS.

OBSERVATION

It was observed that the TRA templates included corporate tax payments for exploration companies. However some of the companies including Statoil and Uranex indicated that they have not made any corporate tax payments as they have not commenced production.

RECOMMENDATION The TRA should endeavour to categorize payments made by extractive companies correctly, as corporate income tax is one of the largest revenue streams expected in the sector. Wrong classification of payments will create the impression that the country is already earning income from profits made by companies.

4 PAYMENT OF RENT /LICENCES AND ROYALTY ON MINERALS

OBSERVATION

It was observed that details of payments for licences and royalties provided by MEM had frequent payments, some weekly and even daily payments. There were instances where cash payments were made by some companies.

RECOMMENDATION

In order to ensure transparency in the payments of rent/licences and mineral royalty, payments should be made by bank transfer and whole, for specific concessions. The provision of supporting documents should indicate clearly, the date of payment, mineral right licence, or mineral export with corresponding bank transfer details.

5 APPLICATION OF TEITA ACT

OBSERVATION

It was observed that a number of reporting entities were not readily willing to provide the data required for the production of the EITI Report. The lack of co-operation is inconsistent with the requirements of the TEITA Act.

RECOMMENDATION

It is recommended that the Tanzania EITI Committee should raise awareness to encourage effective voluntary compliance. 

6 WRONG COMPLETION OF REPORTING TEMPLATES

OBSERVATION

It was observed some companies incorrectly filled the reporting template. For instance some companies reported dollars amounts in place of Shilling. This error has resulted in huge and avoidable discrepancies.

RECOMMENDATION

It is recommended that the company senior managers thoroughly verify their data before they are submitted to the Independent Administrator. Training should be provided to ensure that templates are correctly filled.

7 IMPROVEMENT OF ONLINE LICENSE REPOSITORY

OBSERVATION

There is a publicly maintained register of mineral rights but this should be improved to provide all the information needed as a full cadastral system.

RECOMMENDATION

An online repository should have on public display other related information about each license. For example it should provide details of changes in ownership of mineral rights. contract associated with the license, production levels, product reserves and payments made at the project-level by the companies.