THE government on Thursday proposed to introduce special modalities of taxing individuals engaging in small mining operations, whose annual turnover does not exceed 100m/- per year.
This entails introducing a special income tax at a rate of 3 per cent of the sale value of the minerals, according to Finance and Planning Minister Mwigulu Nchemba.
The government also pushed for the establishment time of payment of income tax for individuals engaged in small scale mining operations to be the time, when selling minerals as opposed to the current regular installment arrangement, which require them to pay tax regardless of the cash flows.
“Such a move will create an obligation for individual employers engaged in small scale mining operations to withhold tax at the time of selling minerals and payment of royalty as established by the Mining Commission,” stated Dr Nchemba while presenting the 2021-2022 national budget in Dodoma, yesterday.
The Finance and Planning Minister also proposed the establishment of the of payment of withholding tax on payments from persons engaged in small scale mining operations to be the time of selling minerals, and payment of royalty at the mining area, mineral buying stations or at mineral and gem Houses designated by the Mining Commission under the Mining Act.
In the same vein, Dr Nchemba called for the abolition of Value Added Tax (VAT) on imported precious metals and raw minerals. The measure is intended to allow more importation of precious metals and raw minerals for refining and smelting by Local industries. This will increase employment and Government revenue, according to Dr Nchemba.
Data from the National Bureau of Statistics (NBS) shows that mining contributed 15.3 per cent to the country’s Gross Domestic Product (GDP), from January to March 2020, thanks to reforms executed during the late President John Pombe Magufuli’s administration.