Last week, President John Magufuli was again an unhappy man with companies who do not pay their taxes.
He made it very clear that the time has come to really toughen up and crackdown on tax evasion by big businesses including mining companies. Everyone is working hard in Tanzania to improve our domestic revenues but according to what our President says, we have to wonder WHY the mining companies think they are excluded and that they can write the laws to suit themselves?
In Dr. Magufuli’s speech to members of the Judiciary that gathered in Dar es Salaam, he gave direct and blatant instructions to the Judges and courts to immediately ensure and enforce the outstanding payments of tax claims on big businesses in Tanzania. There is a staggering amount in excess of 7.5 trillion Tanzanian shillings owing in old, unpaid taxes to the Government. That is the equivalent of about US$ 3,35 billion. Overwhelming in anyone’s language!
Does anyone understand how US$ 3,35 billion can make the most unbelievable differences to the People of Tanzania?
How many schools for our children? How many hospitals and rural clinics for our sick? How many ambulances? New bridges? New electricity power stations? New water systems? New busses? New sports facilities? New or repaired many things?
Tanzania is the 4th largest gold producer in Africa. We also have huge deposits of coal, uranium, diamonds, natural gas and precious and semi-gemstones.
It is exactly one year since President Magufuli’s first attack on the Tanzanian Judiciary. Last year, in early February, he accused the Judiciary of not being supportive in the war against corruption, adding that many people facing serious corruption charges walked free because of poor investigations and mishandling of cases. He publicly stated that he was worried that even the people he was firing because of corruption, would easily secure freedom despite watertight evidence against them!!
Here we are, one year down the line, and what has changed?
Big companies in Tanzania are one of the top sources of tax revenue for the government because a large informal economy within Tanzania operates without payment of any taxes at all.
FOCUS ON ACACIA MINING REFUSING TO PAY TAXES
“It is unacceptable that an investor is extracting our minerals but doesn’t pay taxes. That investor was taken to court and lost, both their case and their appeal, yet still refuses to pay the taxes,” Magufuli said plainly and openly.
It is public knowledge that last year, the media reported in early April that Acacia Mining were found guilty of tax evasion and ordered to pay $41.25 million in taxes to the Tanzanian government.
Of course, Acacia appealed the guilty sentence and in October, the Appeal was dismissed and the guilty sentence was re-enforced.
Did Acacia Mining pay the $41.25 million in taxes?
Is President Magufuli holding back his anger about such cases?
The President stressed that the 7.5 trillion Tanzanian shillings worth of taxes were still unpaid by various companies even after the government won tax claim cases against them in courts and that this was hurting the east African nation’s economy.
He added that about 28 Tanzanian magistrates were prosecuted in 2016 for various criminal offences, most of them charged for corruption, but yet somehow all 28 of them were acquitted. The President stated his doubts openly that all 28 of those magistrates were not guilty.
Tanzanian’s are still fighting fraud and corruption all over the country, even 15 months after President Magufuli, also known as the bulldozer, was elected to office and swore to wage the war against corruption.
What will our Judiciary do in the coming weeks and months? Why is our Judiciary afraid to take steps against all companies, local or overseas, that laugh in the face of the Tanzania Revenue Authority who demand payment of unpaid taxes?
Acacia Mining are in talks to merge with Endeavour Mining, another Canadian mining company. Are we in trouble in this merger happens? Will that merger allow Acacia Mining to have added muscle to ignore Tanzanian laws even more?