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Tanzania Slaps Acacia Mining With USD190bn Tax Fine

by Jason Gorringe, Tax-News.com, London

25 July 2017


Acacia Mining has said that it rejects the legitimacy of a series of tax assessments, said to be worth about USD190bn, from the tax authority in Tanzania.

The company disclosed in a statement on July 24 that it has received a series of Notices of Adjusted Assessment from the Tanzania Revenue Authority for historical corporate income tax in respect of two gold mining operations in the country.

The assessments cover the periods 2000 to 2017 for Bulyanhulu Gold Mine Limited (BGML), and 2007 to 2017 for Pangea Minerals Limited (PML), which operates the Buzwagi mine.

The assessments claim a total of approximately USD40bn of alleged unpaid taxes and approximately USD150bn of penalties and interest owed.

The sums relate to alleged underdeclaration of export revenue by the company, and follow two investigations by a government committee in May and June 2017.

The company's statement confirms that it "disputes these assessments," and that it is "considering all of its options and rights."

"As we have stated previously, Acacia refutes each set of findings and reiterates that it has fully declared all revenues."

The company has been embroiled in a dispute with the Government since March this year when the export of gold concentrate was banned, and has already commenced international arbitration proceedings.

Nevertheless, the company agreed to pay higher royalty and tax rates earlier this month as part of the Government's plans to reform the legislative and regulatory framework for the mining sector.

TAGS: tax | mining | interest | tax authority | tax rates | penalties | Tanzania

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