STAKEHOLDERS have called for the government to hurriedly charge and
collect Capital Gains Tax from the African Barrick Gold (ABG) following
reports that its mother company, Barrick Gold, intends to sell off its
stakes to a Chinese investor.
The move follows information reported by foreign and local media last
week that ABG had resolved to sell its 74 per cent stake in the Africa
Barrick Gold (ABG) to the Chinese state owned China National Gold (CNG).
Concern for Development Initiatives in Africa (ForDIA) through its
Publish What You Pay (PWYP) coalition was bitter over the move and
warned in a statement yesterday that the 20 per cent property gains tax
should be collected before the company packs and leaves.
"We remind and urge the government to set a strategy that will ensure
recovery of 20 per cent capital gains tax and corporate tax arrears from
ABG simultaneous with CNG acquisition of ABG goldmines," the statement
stated in part.
According to ForDIA Executive Director, Mr Buberwa Kaiza, it has already
been confirmed that Barrick Gold and ABG executives have started
negotiations with CNG which might culminate in the latter's total
acquisition of the former.
He said PWYP-Tanzania Coalition is of the opinion that ABG preparations
to exit the country is something to worry, as it relates to government's
competence to enforce payment of 20 per cent capital gains tax.
The capital gains tax refers to gains from the disposal of Tanzanian
assets by non-residents, which is charged at 20 per cent on the realized
"Secondly, PWYP-Tanzania is worried whether the government has learnt
any lessons with regards to achieving the goal of free fiscal regime
offers to foreign large scale mining companies," he said.
"It is perplexing and inconceivable for the government to offer free tax
incentives to richer multinational corporations, bankrolling the
multinationals to make profits and later exit at their will without
paying significant taxes to the government," the ForDIA boss noted.
According to the statement, PWYP-Tanzania coalition considers tax
incentives offered to foreign large scale mining companies unjustifiable
and looks forward to see a competitively, transparently and accountably
transacted ABG-CNG deal.
Reports have it that ABG is cross listed at the London and Dar es Salaam
Stock Exchange Markets with the total value of 2 billion US dollars,
but since Initial Public Offer (IPO) was launched in March 2010, ABG has
only operated in Tanzania with investments in Bulyanhulu Gold Mine
Limited, North Mara Gold Mine Limited and Pangea Minerals operating
Tulawaka and Buzwagi goldmine projects.
The Tanzania Extractive Industries Transparency Initiative (TEITI)
reports published in 2011 and 2012 exposed ABG's tax payment history,
showing that ABG does not pay the 30 per cent corporate tax it is
obliged to the government.
A statement quoting ABG Chief Executive Officer, Mr Greg Hawkins, early
last year indicated ABG's net profit rose by 237 per cent during 2010 to
222.6 million US dollars (over 330bn/-) from 66 million US dollars in
the previous year, meaning Tanzania would have received 66.78 million US
dollars had ABG paid its 30 per cent corporate tax obligation.