Those multinational companies which are operating in the extractive sector in Tanzania have been ordered to open local bank accounts for the purpose of giving power to authorities to scrutinize their finances.
The John Magufuli government is lately trying to curb illicit financial flows in the gas and oil segments amid new mining laws in effect from February 2018.
A report from Global Financial Integrity in 2014 estimated the country suffered loss of $8.9 billion through illegal financial transfers abroad in the period of about last forty years.
In July 2017 the Tanzanian parliament passed couple of legislation to help the government in making significant changes in the oil, gas and mineral extraction sectors in the country.
With this the government came up with Written Laws (Miscellaneous Amendments) Act 2017, the Natural Wealth and Resources (Revenue and Re-Negotiation of Unconscionable Terms) Act 2017 and the Natural Wealth and Resources (Permanent Sovereignty) Act 2017.
More taxes are assured to add up with such significant changes in the sectors said Tanzania Revenue Authority (TRA) commissioner general Charles Kichere.
He further added, “With accounts inside the country, it will be easier to track all their transactions and know their true worth, which was previously not easy to get a hold of… that’s why the country suffered transfer pricing, tax avoidance.”
The TRA officials are also collaborating with international tax experts to learn more about Illicit Financial Flows work and how to implement in curving the practice.
Tanzania is one of the new hotspots for exploration of gas and oil in Africa. If the sector is more organized, it is believed the country’s economy to grow at rapid speed in the coming decade.
