Acacia Mining issued $190bn tax notice by Tanzania
UK firm Acacia Mining has been served a tax demand notice of $190bn by the Tanzania Revenue Authority in relation to operations in the country.
Notices of adjusted assessment were received in connection with Bulyanhulu and Buzwagi mines, involving $40bn of alleged unpaid taxes and around $150bn of penalties and owed interest.
Bulyanhulu Gold Mine (BGML) and Pangea Minerals (PML) own and operate the Bulyanhulu and Buzwagi mines respectively.
Disputing the allegations, Acacia said it has completely declared all revenues and is currently evaluating its options.
The development is a result of an ongoing case against the Acacia, which was accused by the Government of Tanzania of evading tens of billions of dollars in taxes by under-reporting revenue from mining operations at Bulyanhulu, Buzwagi, and North Mara assets.
In March, the government banned the export of mineral concentrate.
Earlier this month, Acacia’s majority stakeholder Barrick Gold started negotiations after filing arbitration notices to settle the government’s claims against Acacia with regard to the Bulyanhulu and Buzwagi mines.
In addition, Acacia agreed to pay the increased royalty rate of 6% as mandated by the new mine legislation in Tanzania, which was recently enforced to allow the government to renegotiate contract terms. Under the new legislation, companies are required to reserve a 16% interest in projects for the government.
Acacia also chose to honour the provision of a 1% clearing fee on exports, as it is keen to avoid disruptions to operations.
The latest notice covers corporate income tax since 2000 for the Bulyanhulu mine, while it relates to the assessment period from 2007 until now for the Buzwagi mine.
Acacia’s mining operations in Tanzania are located within the Lake Victoria Gold Fields, which is claimed to contain more than 50 million ounces of gold.
Image: Operations at Bulyanhulu gold mine in Tanzania. Photo: courtesy of Acacia Mining.