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Dar mulls imposing VAT on foreign bidders in mineral auctions

THE government considers imposing Value Added Tax (VAT) for foreign bidders participating in mineral auctions in the country. Stanslaus Nyongo, Deputy Minister of Minerals told parliamentarians that the government is carefully examining the best practices of the arrangement before rolling it out.

Responding to a supplementary question from Special Seats MP (CCM), Ms Ester Mahawe, Mr Nyongo said, “Ideally foreigners are not required to pay VAT. We want to introduce the new arrangement to bring fairness but foreigners will then be refunded at the airport. “

This is the practice used in several other mineral-rich countries, he asserted. The lawmaker was concerned that local mineral bidders had been subjected to paying VAT, however, some had been conniving with foreigners to skip the government arm.

“This has in turn caused unfair competition and the government losing its entitled revenues,” she said. In addition, she charged that Tanzanite miners at Mirerani are struggling to address trespassers among miners, “how is the government helping to address this crisis?” she questioned.

The Deputy Minister said the association of the Tanzanite Miners at Mirerani had adopted a comprehensive strategy which is expected to put to an end to trespassing that has occasionally resulted to fighting amongst themselves.

It was not clear when the new system will come to effect especially a year after the government imposed a clearing fee of 1 per cent of the value of mineral exports. Tanzanite minerals contributed 140m/- to Manyara Council between 2015 and 2017.

Tanzanite One, the largest mineral firm, contributed 429,664 US dollars during the same period. The government said that works on the one stop centre for Tanzanite minerals at Naisinayi Economic Processing Zone in Mirerani was going to ensure the Tanzanite Mineral-rich region benefits from its endowed resources.

Initially, Tanzanite auctions were held in Arusha, a neighbouring region, denying Manyara Region its deserving share. Mr Nyongo reaffirmed the government commitment to set up a centre of excellence in Mirerani, that will be used, among other things, for mineral auction.

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