Tanzanian Tax Administration Receives Appeal to Formulate Tax Policies for the Extractive Industry

  • REPOA has urged the Tanzania government to focus on reforms that will enhance the extractive industry.

Tanzanian Tax Administration has received an appeal by the Research on Poverty Alleviation, REPOA group to look inward for the formulation of policies that will impact positively on the extractive industry.

In specific terms, the local economic think-tank wants the formulation of these policies by the government to cut across the legal and tax regimes, placing a premium on the extractive industry with an increase in the benefits derived from natural resources.

The group further highlights in the recent study that if done well, resources garnered from these reforms are capable of bringing about an inclusive development across the nooks and crannies of the nation.

Dr Donald Mmari, the Executive Director of REPOA made known the findings of this study to the public during a recent official opening of a five-day training workshop for policymakers and civil society organisations to improve their understanding of basic principles of good governance of natural resources for sustainable and inclusive development.

The workshop which is being conducted jointly by REPOA and Natural Resource Governance Institute (NGRI) majorly dwelled on the viable and legal ways the government can shore up its revenue base considering the ever-dwindling drop in Tanzania’s Gross Domestic Product (GDP).

Africataxreview.com gathered that the recommendation by the group to use tax in driving growth in its extractive sector is due to the heavy endowment of natural resources in the country, reducing the growing number of the unemployed.

A focus on the huge potential for natural gas discovered in southern parts of the country featured as a major talking point in the line of policy review, considering that natural resources are rapidly being overexploited with far-reaching consequences on the sustainability of the resources for further generations as well as degradation of the environment.

REPOA’s submission through its Executive Director thus,

“An important aspect of resource governance to note is that the resources alone cannot guarantee development, but should be coupled with strong institutions and good governance,”

The exploitation of natural gas alone is assumed to create direct and indirect multiplier effects in other sectors such as agriculture, industry, construction and creation of jobs in upstream, midstream and downstream phases,”

“In the face of the environmental crisis, the government has to respond by creating an enabling eco-friendly environment in terms of policies, legal, governance institutions and regulatory frameworks that will allow harnessing the resources.

“An enabling environment is key in attaining effective natural resource management while discouraging corrupt practices,”

Tanzanian Tax Administration: Former Government’s Official Reacts to Call for Tax Reform

In response to REPOA’s call for reform, former Commissioner of Minerals in the Ministry of Minerals, Dr Dalaly Kafumu supports the motion and calls for the government to take deliberate action to ensure that formulation of policies to guide the extraction and utilisation of natural gas and coal as the world gears towards the transition to clean energy is fast-tracked.

In his concluding remarks, the former commissioner who is now a consultant in the extractive industry appealed for balanced policies that will protect both the interests of  Tanzanians and investors alike.

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