Africa’s biggest gold miner AngloGold Ashanti has started paying 30 percent corporate tax to the Tanzanian government this year for its Geita mine, in line with the east African country’s new mining policy.
This is the first time that the mine has started paying corporate tax in Tanzania since it began commercial gold production in August 2000.
Tanzania, which is Africa’s fourth-largest gold producer, previously granted a tax holiday to mining companies that exempted them from paying corporate tax until they recouped investment costs in the mines, Reuters reports.
“AngloGold Ashanti has announced that it will pay 86 billion shillings ($48 million) corporate tax this year … The company has already paid 8.6 billion shillings out of the amount,” the Tanzanian president’s office said in a statement on Thursday.
The announcement on the tax payment was made by AngloGold’s Chief Executive, Mark Cutifani, to Tanzanian President Jakaya Kikwete, during a meeting in Perth, Australia, on Thursday ahead of the Commonwealth Heads of Government Meeting.
The government began negotiations with mining companies to pay the tax after drafting a new mining policy in 2009 and the subsequent passing of new mining legislation last year.
“This is the first time that AngloGold will start paying corporate tax since it entered the Tanzanian market,” said the presidency.
Australian gold miner Resolute Mining was the first mining company to start paying corporate tax in Tanzania, according to the African country’s minerals ministry.
Mining officials said the government was also in talks with African Barrick Gold , which has four gold mines in Tanzania, on payment of the tax.
Tanzania announced last week it plans to raise royalty payments on exports of gold by the end of this year as it seeks to restructure its mining sector.
The 2010 Mining Act increased the rate of royalty paid on minerals such as gold from 3 percent to 4 percent and required the government to own a stake in strategic mining projects.
Sources in Tanzania’s mining industry told Reuters that mining companies were yet to agree on the new royalty rates, despite the government’s announcement.