THE UNIVERSITY OF DODOMA

COLLEGE OF BUSINESS AND ECONOMICS

COURSE NAME; PUBLIC FINANCE AND TAXATION II

COURSE CODE: AF 332

Taxation reform and amendment

These is the process of assessing the taxation act and system of colleting tax revenue in mining
sectors and making changes for any loopholes of the system in order to increase revenue
collection together with the expansion of mining sector in the country.

Since 2001 however the regulatory environment for mining has seen consistent change with
ongoing tightening of the fiscal regime, with some of the most significant changes being made in
the past 3 years, where by different straight were made to increase revenue collection in mining
sectors such as;

Value Added Tax

Tanzania’s value added tax (VAT) is charged on domestic and imported goods and services (The
United Republic of Tanzania, 2006c). The Value Added Tax Law exempts mineral sector
companies from paying VAT on some imported inputs and capital goods such as technology and
machines for mining sector so that they can collect the tax on processing and marketing the
minerals everyone will pay the tax.

But these lead to high tax rate problem because the extraction company pay 18%of the amount of
the minerals to the government as VAT but also the costume (wholesale) also will pay 18% as
VAT to the government as tax so the price of the minerals become very high to the costume as
results of tax avoidance.

Required:

1. What are the macroeconomic issues impacts of minerals in Tanzania?

2. Describe different effort and reform to improve tax revenue collection from mining sector in
Tanzania.
3. Explain the challenges faces tax policies and related issues in regard to mining sector in
Tanzania