Protest Barrick
Home About us Issues International Campaigns Press Actions

Activists want Barrick taxed on gains

by PIUS RUGONZIBWA Daily News Tanzania
August 22nd, 2012

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 net gains.

"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.

 

Join our e-mail list