Mining Caterpilar Equipments

Gov’t Revenues from Extractive sector increases, Tsh 2.4 trillion unreconciled

Posted on February 22, 2016 · Posted in General

Prof. Sospeter Muhongo, Tanzania Minerals Minister

Government revenues reportedly paid by mining, Oil and gas companies, collectively known as the Extractive Industries Sector has increased by over five times from USD 102,110,000 in 2011 to USD 602,119,124   but the problem of unsettled differences between what was paid by the companies and what was received by government has remained a chronic problem with an unexplained source of an extra Tsh 2.4 trillion reported to have been received by government  yet to be reconciled in this year’s Tanzania Extractive Industries Transparency Initiative (TEITI) report.

According to the sixth report of Tanzania Extractive Transparency Initiative (TEITI) for the year ending June 2014 released by the government in November, 2015, the net difference between the payments declared by extractive companies and the government at the beginning of the reconciliation amounted to Tsh20,687,375,865 (1.69%) of the total amount declared by the government and by end of the reconciliation the remaining net difference amounted to Tsh 2,428,572, 571 (0.20%) of the total payments declared by governments.

Reconciliation Government Tax Payers Difference %ntage
Beginning of reconciliation total payments declared 1,221,828,509,976 1,201,141,134 20,687,375,865 1.69%
End of Reconciliation total payments declared 1,221,215,617,951 1,218,787,045,379 2,428,572,571 0.20%

After the adjustments the net difference of Tsh2,428,572,571 represents the aggregate to the positive (government reporting more) differences amounting to Tsh4,245,931,594 and the negative (government reporting less) differences of Tsh 1,817,359,022 is detailed below including adjustments made to reporting entities, initial amounts and unresolved residual differences.

At total of 99.6% of payments were selected and included in the reconciliation. This was achieved by including all companies making payments in excess of Tsh 150 Million. The revenues collected from the remaining companies which were submitted by the Ministry of Energy and Minerals (MEM), Tazania Revenue Authority (TRA) and Tanzania Petroleum Development Corporation (TPDC).

The list of extractive companies selected by the Multi Sectoral Group (MSG) for reconciliation in 2014 reconciliation report exercise included 38 mining companies and 21 oil companies. Out of these companies, four companies were nowhere to be traced.  These were Tanzanite One Trading, Songshan Geology Minerals Company Ltd, Afren Gabon Limited and  Siwandu Metals limited

Despite searches, the whereabouts of these companies was not known and it is believed they could have closed business in Tanzania and not physically present in the Country. The total revenue received and reported by the government entities from these 4 companies was Tsh2.5 billion (0.2%) of the total government reported receipts.

“The independent administrator and the TEITI Secretariat applied all efforts to obtain reporting information from these entities without success”

Five Companies Arm (T) Ltd, Cultural Heritage Ltd, Midwest Mineral Processor Ltd, PR NG Minerals and Willy Enterprises Ltd, did not submit a certified reporting template.

Reported government receipts by company for all 59 Companies after reconciliation

No Company Final Govt Reported (Tzs) Final Govt Reported (USD) Final govt reported USD into Tzs’000 Total Govt Reported in Tzs
1 ABC Exploration Ltd 2,118,877 179,904 291,265 2,410,141
2 Anga Resources Ltd 177,795 287,850 287,850
3 Arm (T) Ltd 278,270 278,270
4 Bulyanhulu Gold Mine Ltd 86,326,841 11,905,738 19,275,390 105,602,231
5 Canaco Tanzania Ltd** 378,089 227,845 368,881 746,970
6 Geita Gold Mining Ltd 151,581,597 27,199,904 44,036,645 195,618,242
7 H.J. Stanley & Sons Ltd 408,061 408,061
8 Jacana Resources (T) Ltd 139,556 152,542 246,965 386,522
9 Kabanga Nickel Co Ltd 2,516,527 423,324 685,362 3,201,889
10 Mantra Tanzania Ltd 6,549,896 1,908,037 3,089,112 9,639,008
11 Maweni Limestone Ltd 16,902,189 16,902,189
12 Mbeya Cement Co. Ltd 17,640,701 17,640,701
13 MDN Tanzania Ltd 185,449 45,096 73,010 258,460
14 Midwest Minerals Processor Ltd 848,856 848,856
15 Minjingu Mines & Fertilisers Ltd** 765,703 12,888 20,866 786,569
16 Ngwena Ltd 1,065,523 140,652 227,715 1,293,240
17 North Mara Gold Mine Ltd 43,290,913 14,542,850 23,544,874 66,835,788
18 Northwestern Basemetals 231,458 374,731 374,731
19 Nyanza Goldfields Ltd 270,784 438,399 438,399
20 Nyanza Mines (T) Ltd 586,403 14,941 24,189 610,592
21 Pangea Minerals Ltd 47,972,681 11,404,364 18,463,666 66,436,374
22 PR NG Minerals Ltd*** 297,250 9,645 15,615 312,865
23 Resolute (T) Ltd 20,182,588 2,728,015 4,416,656 24,599,244
24 Shanta Mining Company 13,154,647 4,534,329 7,341,078 20,495,725
25 Siwandu Metal Ltd*** 135,303 219,056 219,056
26 SongshanGeology Minerals 6,576 147,974 239,570 246,146
27 State Mining Co Ltd 314,904 33,510 54,253 369,157
28 TADC 2000 139,662 1,008,335 1,632,494 1,772,156
29 Tancan Mining Co Ltd 679,786 679,786
30 Tanga Cement Co Ltd 45,620,166 45,620,166
31 Tanzania Portland Cement Co Ltd 44,500,684 44,500,684
32 Tanzanite One Trading Ltd 1,072,454 29,194 47,265 1,119,719
33 Tanzanite One Mining Ltd 822,651 211,138 341,832 1,164,483
34 TOL Gases Ltd 728,062 728,062
35 Uranex (T) Ltd 233,073 368,619 569,794 829,867
36 Warthog Resources Ltd 147,740 239,191 239,191
37 Williamson Diamonds Ltd 8,101,207 2,858,200 4,627,426 12,728,634
38 Willy Enterprises Ltd 980,163 980,163
  Subtotal Mineral sector 516,390,008 81,050,123 131,220,150 647,610,158
1 Afren Gabon Ltd 652,442 154,738 250,521 902,963
2 Beach Petroleum (T) Ltd 741,877 374,256 605,921 1,347,798
3 BG International (T) Ltd 1,678,333 1,678,333
4 BG Tanzania Ltd 27,391,310 887,590 1,437,008 28,828,818
5 Dodsal Hydrocarbon & Powder (T) Ltd 1,155,065 184,670 298,980 1,454,045
6 Dominion (T) Ltd 1,296,724 118,483 191,825 1,488,549
7 Etabllissement Maurel et prom 1,845,095 101,131 163,731 2,008,826
8 Heritage Oil (T) Ltd 200,071 200,071
9 Heritage Rukwa (T) Ltd 1,068,190 464,275 751,661 1,819,851
10 Jacka Resources Ltd 79,235 241,372 390,781 470,016
11 Ndovu Resources Ltd 256,049 215,612 349,076 605,125
12 Ophir E.A Ventures Ltd 1,668,178 155,467 251,700 1,919,879
13 Ophir Tanzania (Block 1) Ltd 361,938,833 361,938,833
14 Panafrican Energy (T) Ltd 76,847,672 37,258 60,320 76,907,992
15 Petrobrass (T) Ltd 861,187 233,277 377,676 1,238,863
16 RasAlKhaimah Gas (T)Ltd** 361,553 361,553
17 Songas Ltd 43,204,149 2,323,802 3,762,235 46,966,385
18 Statoil (T) As 38,817,148 279,980 453,287 39,270,435
19 Swala Oil & Gas Plc 1,011,017 162,433 262,980 1,273,997
20 Tanzania Petroleum Development Corporation 1,483,563 1,483,563
21 Wentworth Gas Ltd 1,440,067 1,440,067
Subtotal Gas Sector    563,997,757 5,934,344 9,607,704 573,605,460
Grand Total Revenue 1,080,387,765 86,984,468 140,827,853 1,221,215,618

* Difference due to unreporting by the Companies and amounts unilaterally reported by government entities

**Differences remaining after the information submitted has been reconciled