Antinuclear

Australian news, and some related international items

Australian company Mantra Resources duped Tanzania out of taxes for its uranium profits

the transfer of Mantra Resources Limited to ARMZ enables its former shareholders to pocket $1.04 billion without paying capital gains to the Tanzanian government….  Mantra Resources Limited of Australia was supposed to have paid capital gains tax to Tanzania.

Sh320bn loss looming over uranium project  , 29 September 2012 By Felix Lazaro, The Citizen Dar es Salaam. Tanzania risks losing about Sh320 billion in mining taxes because of weak legal checks, particularly when it comes to uranium.

Local mining experts said yesterday that the country must go back to the drawing board and put in place a watertight policy and regulations before it allows uranium mining.Earnings from the mineral are believed to have the potential to turn around the lives of thousands of poor Tanzanians.

The chief concern right now, though, is that some subsidiaries of multinational firms licensed to explore uranium in Tanzania are capitalising on a weak legal and institutional framework to transfer ownership to affiliated companies. In the process, there are missed opportunities to collect revenue.

According to a renowned environmental lawyer, Dr Rugemeleza Nshala,
the government could lose up to Sh320 billion in unpaid capital gain
tax by the ARMZ holding company, which holds a prospecting licence for
the Mkunju River uranium project.

Speaking at a breakfast meeting organised by the Policy Forum, he
cited the example of Mantra Resources—which reportedly changed hands
in a span of three years from two connected companies, ARMZ of Russia
and Uranium One.

“In short, the transfer of Mantra Resources Limited to ARMZ enables its former shareholders to pocket $1.04billion without paying capital gains to the Tanzanian government,” said Mr Nshala.ARMZ of Russia owns
79.49 per cent of Mantra Resources. According to the expert, under
section 36 (1) of the Income Tax Act, Mantra Resources Limited of
Australia was supposed to have paid capital gains tax to Tanzania.
The Tanzania Revenue Authority issued a series of demand notices to
ARMZ seeking $200 million in capital gains tax and stamp duty, Dr
Nshala said.

ARMZ has disputed the tax demand and currently has a case pending at
the Tax Revenue Appeal Board (TRAB).

According to Dr Nshala, after complete sale of the Mantra Resources
uranium to its affiliated companies—ARMZ and Uranium One—the company
will earn about $250 million annually but will pay just $5 million in
taxes, royalties, fees and workers’ Pay as You Earn.

“This is a very miniscule amount that cannot warrant exploitation of
such environmentally harmful minerals,” said Dr Nshala…… “The
principle is that the country with minerals has to receive a large
share from mining activities, otherwise it should not allow the
activities to take place,” pointed  out Dr Nshala…. Tanzania will
have to work on issues such as how to control dusts, monitor people
and ensure self-storage of the processed uranium. It will also have to
work on proper waste management and record keeping for future use.
http://thecitizen.co.tz/component/content/article/37-tanzania-top-news-story/26114-sh320bn-loss-looming-over-uranium-project.html

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September 29, 2012 - Posted by | AUSTRALIA - NATIONAL, business, politics international

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