Tue Jun 14, 2011 7:37pm GMT
DAR ES SALAAM, June 14 (Reuters) - Tanzania's parliament on Tuesday approved a $27.4 billion five-year development plan, backing the proposed introduction of a super-profit tax on mining companies.
Revenue from the east African country's mineral resources will be an important source of financing for the medium-term programme, the plan stated. For more see.
Lawmakers approved the plan in its entirety without making any changes.
"The government's five-year development plan has been approved by majority votes of members of parliament," National Assembly Speaker Anne Makinda said in parliament late on Tuesday after lawmakers voted to endorse the plan.
Tanzania, Africa's fourth-largest gold producer, has remained noncommittal on if and when it might introduce the super-profit tax.
The idea of such a tax has raised eye-brows among foreign investors in Tanzania. On Sunday, the country's mining minister clarified that Tanzania would not impose the new tax on existing companies but would negotiate with the companies to have them pay.
Tanzania cites rising commodity prices as justification for the tax.
Its annual gold exports have tripled to $1.5 billion in the last five years due to the increase in the price of gold but government revenues have remained at around $100 million a year, the plan stated.
Under the five-year plan, Tanzania targets raising 2.7 trillion shillings ($1.73 billion) out of the 8.5 trillion shillings that will be invested annually in development projects.
The rest of the money will come from loans and grants, sovereign bonds and private-public partnerships, the government said.
The plan said the government would continue with the process of accessing external sovereign debt markets as a source of infrastructure financing.
Central Bank of Tanzania Governor Benno Ndulu told Reuters in March the country planned to issue a $500 million Eurobond in the 2011/12 fiscal year, once it had a sovereign rating in the next seven to eight months.
African Barrick Gold (ABGL.L: Quote) has four gold mines in Tanzania while Australia's third-largest gold miner, Resolute Mining (RSG.AX: Quote), and South Africa's AngloGold Ashanti (ANGJ.J: Quote) also have gold operations there.
The move to introduce the new tax follows similar steps in other producer countries such as Australia that have sought to increase fiscal revenue from the mining industry and to take advantage of rising prices. (Reporting by Fumbuka Ng'wanakilala; Editing by Richard Lough and James Dalgleish, sourced Thomson Reuters)
DAR ES SALAAM, June 14 (Reuters) - Tanzania's parliament on Tuesday approved a $27.4 billion five-year development plan, backing the proposed introduction of a super-profit tax on mining companies.
Revenue from the east African country's mineral resources will be an important source of financing for the medium-term programme, the plan stated. For more see.
Lawmakers approved the plan in its entirety without making any changes.
"The government's five-year development plan has been approved by majority votes of members of parliament," National Assembly Speaker Anne Makinda said in parliament late on Tuesday after lawmakers voted to endorse the plan.
Tanzania, Africa's fourth-largest gold producer, has remained noncommittal on if and when it might introduce the super-profit tax.
The idea of such a tax has raised eye-brows among foreign investors in Tanzania. On Sunday, the country's mining minister clarified that Tanzania would not impose the new tax on existing companies but would negotiate with the companies to have them pay.
Tanzania cites rising commodity prices as justification for the tax.
Its annual gold exports have tripled to $1.5 billion in the last five years due to the increase in the price of gold but government revenues have remained at around $100 million a year, the plan stated.
Under the five-year plan, Tanzania targets raising 2.7 trillion shillings ($1.73 billion) out of the 8.5 trillion shillings that will be invested annually in development projects.
The rest of the money will come from loans and grants, sovereign bonds and private-public partnerships, the government said.
The plan said the government would continue with the process of accessing external sovereign debt markets as a source of infrastructure financing.
Central Bank of Tanzania Governor Benno Ndulu told Reuters in March the country planned to issue a $500 million Eurobond in the 2011/12 fiscal year, once it had a sovereign rating in the next seven to eight months.
African Barrick Gold (ABGL.L: Quote) has four gold mines in Tanzania while Australia's third-largest gold miner, Resolute Mining (RSG.AX: Quote), and South Africa's AngloGold Ashanti (ANGJ.J: Quote) also have gold operations there.
The move to introduce the new tax follows similar steps in other producer countries such as Australia that have sought to increase fiscal revenue from the mining industry and to take advantage of rising prices. (Reporting by Fumbuka Ng'wanakilala; Editing by Richard Lough and James Dalgleish, sourced Thomson Reuters)
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