Tanzania: More revenues from extractives despite falling prices

New EITI Reports show that revenues from the extractive sector to the government increased by 28%.

Tanzania, the fourth largest gold producer in Africa, has published its latest EITI Reports covering the financial years 2012/13 and 2013/14. The extractive sector is increasingly contributing to Tanzania’s growing GDP, and the reports show that revenues from the sector to the government increased by 28%, from USD 602 million (TZS 956 Billion) in 2013 to USD 754 million in 2014 (TZS 1,221 billion). This is due mainly to the increased gold production and corporate tax paid by one company (Ophir Tanzania), which represented 30% of total extractives revenue in 2014.

Providing information on taxes to the public

Debate around the revenues from the extractive sector has grown in Tanzania. The  media and civil society have particuarlly focused on two questions: whether the share received by the state from its extractive deals, particularly in the gas sector, represents a ‘fair’ deal, and secondly how those revenues are being used to the benefit of citizens.

The new reports describe the legal and fiscal regime related to oil, gas and mining activities, including the terms for tax rates, royalties, profit shares and signature bonuses offset out in the new Petroleum Act 2015. This information can help citizens, civil society and companies interested in the sector to understand whether what should have been paid was paid.

More companies are paying more taxes, and corporate tax is the main driver of the increased government revenue. The reports show how much the government received in tax payments from companies operating in the country and lists the top tax payers in the sector in the period covered.

Suspension lifted and timeliness of data improved

Tanzania was suspended in September 2015 for failing to meet the reporting deadline on 30 June 2015. Following the publication of these reports, the EITI Board decided to lift the suspension on 17 December 2015. With the publication of these reports covering two fiscal years, the country is making progress on more timely reporting.

Tanzania enacted an EITI law earlier this year, which is meant to address legal obstacles for reporting and ensure compliance with the EITI Requirements on reporting timeliness. The legislation requires companies engaged in the exploitation or extraction of oil and mineral resources and the relevant government agencies to provide accurate information to the yearly EITI reporting process. The legislation also provides for disclosure of contracts and beneficial owners in the oil, gas and mining sectors.

To find out more about the EITI in Tanzania, visit the country page on eiti.org or Tanzania’s EITI website.