A)

The mining sector in Tanzania has been facing several microeconomic issues that have impacted its
growth and development. The followings are the microeconomics issues faces mining industry in
Tanzania;

Lack of proper infrastructure, one among microeconomic issue that faces mining industry in Tanzania is
poor infrastructures like roads, water, electricity and others which made it difficult for mining
companies to conduct their productivity and bring difficulties in transport their products to the market.
This has resulted in increased transportation costs, which have reduced the profitability of mining
operations due to high costs incurred during production and cause low revenue collected to the
government (tax) and even also lead to other people to avoid paying tax so that to protect their profits.

Shortage of skilled labor in the mining sector, another issue is the lack of skilled personels to conduct
well mining activities. The lack of skilled workers has made it difficult for mining companies to operate
efficiently and effectively. This has resulted in increased labor costs and reduced productivity. Due to
high labor costs and reduce productivity it results to small revenue and profit from the productivity thus
also may lead small amount of tax that will be paid to the government.

Government's policies and regulations, also these may be the other macroeconomic factor that faces
mining industry and brings difficult in their operations. The government has imposed high taxes and
fees on mining companies, which have increased their operating costs and hinder their profitability in
which will result also to pay low tax to the government. Moreoververnment's strict regulations on
environmental protection have also increased compliance costs for mining companies thus results to
high costs of production and low profit.

Corruption and bribery are also major issues that have impacted the mining sector in Tanzania. Mining
companies have reported cases of corruption and bribery when dealing with government officials, which
have increased their operating costs and reduced their profitability thus also will result to pay low tax
compared to the profit they make in the production.

Environmental degradation, the other macroeconomic issue that hinder mining industry in Tanzania is
the environmental degradation that resulted from it's productivity operations. Mining activities can have
a significant impact on the environment, including deforestation, soil erosion, and water pollution.
These environmental impacts can have long-term effects on the ecosystem and human health. In recent
years, there have been concerns about the environmental impact of mining activities in Tanzania,
particularly in areas where artisanal and small-scale mining takes place.

In conclusion, the microeconomic issues facing the mining sector in Tanzania include a lack of proper
infrastructure, a shortage of skilled labor, government policies and regulations, and corruption and
bribery and environmental degradation.
B) Tanzania has implemented several efforts and reforms to improve tax revenue collection in
recent years. The followings are some of them;

Modernization of the Tanzania Revenue Authority (TRA) through the use of technology, due to
some difficulties that arises and hinder tax collection, one among of the effort that Tanzania has
made is to modernize and improve the Tanzania Revenue Authority (TRA) in their operation
activities including the use of technology for tax collections. It introduced an electronic tax
system that allows taxpayers to file their tax returns online, pay taxes electronically, and receive
electronic receipts. This has made the tax payment process more efficient and transparent,
reducing opportunities for corruption and increasing compliance. Also it is the best option than
helps to collect tax easily and save time rather than to collect directly from each tax payer.

Simplification of tax laws and procedures, also the government has revised tax laws to make
them more user-friendly and easier to understand for taxpayers. The government done some
amendments from the old Acts so that to ensure fairly treatment to tax payers and being updated
and also to enable taxpayers to understand and and use it as required. This has helped to reduce
confusion and increase compliance among taxpayers since all people can access the laws and
procedures, understand them and be aware of it.

Educate taxpayers on their tax obligations, The TRA has launched public awareness campaigns
to educate citizens on the importance of paying taxes and how to do so correctly. They provide
education in the societies, at schools and colleges, they create Tax clubs and other ways so that
to ensure tax education reach the society. This has helped to increase compliance among
taxpayers who were previously unaware of their obligations and increase tax collected from
different people.

Increase focus on combating tax evasion and fraud. The TRA has established a special unit
dedicated to investigating cases of tax evasion and fraud, and has increased penalties for those
found guilty of such offenses. It introduce some penalties in which will be charged to those who
will conduct fraud and tax evasion so that to make people to pay taxes as they are required to
pay on their own willing. It helped to deter individuals and businesses from engaging in such
activities.
Establishment of the Tanzania Mineral Audit Agency (TMAA) in 2009, the TMAA is
responsible for monitoring and auditing mining operations to ensure compliance with laws and
regulations. The agency also assesses the value of minerals produced and ensures that mining
companies pay appropriate taxes and royalties. Through the establishment of TMAA helps to
enable effectively control and increase taxes from different Mining sectors.

In 2017, Tanzania introduced a new Mining Policy that aimed to increase revenue collection
from the sector. The policy includes provisions for increasing government participation in
mining activities, promoting local content development, and improving environmental
management practices.

Overall, these efforts and reforms have led to significant improvements in tax revenue collection
in Tanzania. In 2019, Tanzania's tax revenue collection increased by 7.5% compared to the
previous year.

C) The mining sector is a crucial industry that contributes significantly to the economic growth of
many countries. However, tax policies and related issues have posed significant challenges to the
mining sector. The followings are some of them;

Complexity of tax policies and regulations, Tax policies in the mining sector are often complex
and difficult to understand, making it challenging for companies to comply with them. Despite of
the simplicity and amendments which are conducted to make them simpler and easy
understandable, tax needs a lot of knowledge to access and understand them. This complexity
can lead to non-compliance, which can result in penalties and fines.

Lack of transparency in tax policies. Many countries do not have transparent tax policies, which
can lead to corruption and tax evasion. This lack of transparency can also make it difficult for
companies to plan their investments and operations effectively.

Frequent changes of tax policies and regulations, these changes can be sudden and unpredictable,
making it challenging for companies to plan their investments and operations effectively.
Frequent changes in tax policies can also create uncertainty and discourage investment in the
sector.

Lack of coordination between different government agencies responsible for tax policies in the
mining sector. This lack of coordination can lead to conflicting policies and regulations, which
can create confusion and increase compliance costs for companies.

In conclusion, tax policies and related issues pose significant challenges to the mining sector.
The complexity of tax policies, lack of transparency, frequent changes, and lack of coordination
between government agencies are some of the major challenges that need to be addressed.