MARA: ARTISANAL and small-scale miners (ASMs) in Tanzania’s Lake Zone have expressed their commitment to combat illegal financial flows (IFFs), particularly mineral smuggling, but they argue that a flawed taxation system is hindering their efforts.
In Mara region for instance, miners have no objections to the national laws implemented through the Ministry of Minerals. However, they take issue with new by-laws introduced by local councils under the President’s Office Regional Administration and Local Government Authorities (PO-RALG).
In contrast, miners in Geita Region are dissatisfied with both the national and local regulations, arguing that the long list of levies is an unbearable burden for ASMs.
Picture this-in October, President Samia Suluhu Hassan launched the Presidential Commission on Tax Reform, instructing it to review the country’s tax rates. The President pointed out that despite Tanzania’s population of 65 million, only 2 million people pay taxes, underscoring the importance of ensuring taxes are fair and align with one’s ability to contribute.
During her speech, President Samia emphasised the government’s efforts to establish a just tax system where eligible citizens pay the correct amount, ensuring all taxes are collected according to the law.
Commenting on this, Mara Regional Miners Association (MAREMA) Chairperson David Bitta, has urged the Presidential Commission on Tax Reform to involve ASMs in the discussion.
He claims that local councils often bypass miners during the formulation of by-laws, leading to unfair taxation that places a heavy financial burden on them.
Mr Bitta further explained that miners often invest significant resources into their operations, only to see minimal returns due to unpredictable outcomes from mining activities. As a result, they are forced to pay levies regularlyeven though they may not be generating significant income.
“Sometimes, after a few years of underground work, miners may not get anything, but they still have to pay daily or monthly levies,” he lamented. “When they do manage to get something, they resort to smuggling to recover their costs.” As an association, MAREMA has expressed that members are willing to contribute only according to the national tax laws, which include a 2 per cent levy to be paid to the Tanzania Revenue Authority (TRA), a 6 per cent loyalty fee, a 1 per cent inspection fee and a 0.3 per cent service levy.
However, the by-laws introduced by local councils are considered illegal by the miners. According to Bitta, each council sets its own tax rates and miners were not consulted during the by-law creation process.
For example, some councils charge a daily mining-pit entrance fee of 1,000/-, while others impose a monthly fee of between 50,000/- and 100,000/-. Miners also have to pay 1,000/- for each gold ore bag, in addition to land fees for the minerals processing areas. These inconsistent and unregulated levies are seen as major obstacles to mining activities in the region.
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Hence, MAREMA has called for the Ministries of Minerals and Finance to collaborate on improving the taxation system in order to reduce the incentive for smuggling.
Although no smuggling incidents have been reported by MAREMA, they believe that the chaotic taxation system contributes to this problem. “We see the government catching smuggling perpetrators, but the contradictory tax system is one of the reasons behind it,” Bitta added. Miners in Geita Region are also voicing their frustrations. According to Geita Regional Miners’ Association (GEREMA) Chairperson Titus Kabuo, the double taxation miners face requires review.
In Geita, miners are required to pay 7 per cent tax on every 100 gold ore bags and then another 7 per cent after the minerals are processed. Additionally, they must pay a 0.3 per cent service levy and a 2 per cent tax to TRA.
Mr Kabuo described this as an “exploitation” of miners, as the tax is levied twice on the same items: Once on the ore and again on the processed mineral.
“The tax should be applied only once on the actual gold, not the ores,” Mr Kabuo argued. He explained that mining outcomes are often unpredictable, so taxing both the ore and the processed gold places an unfair burden on miners. Mr Kabuo also emphasised the government’s efforts to tackle smuggling, including establishing mineral buying centers near mining sites.
However, he suggested that the current tax system is still pushing miners toward smuggling, as they are reluctant to travel long distances to sell their minerals due to the high taxes and transport costs.
In addition to the taxation issues, Mr Kabuo urged the government to introduce tax exemptions for imported mining machinery. ASMs often struggle with limited capital and outdated technology, which results in low productivity. The traditional mining methods they use require significant energy, financial resources and time while yielding limited results. Mr Kabuo proposed that the government provide subsidies for mining machinery, similar to the support it offers in the agricultural sector, to help miners increase their output and contribute more to the national economy.
Geita’s miners also face challenges with high interest rates on loans, often taken from wealthy individuals or foreign entities, which only further exacerbates their financial difficulties.
“We are forced to take loans from tycoons, but the interest rates are so high that we end up earning little while they profit,” said Mr Kabuo, reflecting on the economic imbalance faced by many ASMs.
Meanwhile, the Geita Women Mining Association (GEWOMA), led by Ms Asia Masimba, also stressed the need to simplify the tax system. The association’s members, who engage in nomadic mining, propose that taxes be levied only on actual gold, rather than on the ores, as the results of mining are highly unpredictable.
In conclusion, while miners in Tanzania are eager to contribute to the fight against mineral smuggling, the current taxation system—marked by excessive levies and inconsistent regulations-remains a significant barrier. Miners are calling for more consultation in the creation of local by-laws, tax reforms to ease their burden and better access to modern equipment to improve efficiency and reduce the reliance on informal markets.
