Fined by Tanzania’s government for under-declared exports
On 29 June 2017 the Government of Tanzania announced the publication of draft legislation which recommended changes to the legal framework governing the natural resources sector in Tanzania. In addition to this Parliament has approved the new Finance Act, which will impose a 1% clearing fee on the value of all minerals exported from the country from the 1st July 2017. New legislation was urgently passed by the Parliament in Tanzania on 3 July 2017 completely altering the legal and regulatory regime that had attracted FDI in the entire resources sector to date. The legislation is expected to become law in early July.
The bill is split into $40 billion in unpaid taxes and an additional $150 billion in interest and penalties. The allegations are based on the findings of government-appointed committees. Last month, after the outcome of the government-ordered audit of the mining industry was released, John Magufuli, president of Tanzania, described Acacia’s operations in the country as a “kind of exploitation.”
The $190 billion fine represents round 40 times Acacia’s total revenue last year, nearly two centuries worth of revenue or four times the size of Tanzania’s GDP. In comparison, the mining sector contributed just 4% of Tanzania’s GDP in 2015.
Source: Acacia Mining, Bloombergs