Tuesday, April 09, 2013

Tanzania: on the importance of capital gains taxes

A tweet from Zitto Zuberi Kabwe, Tanzanian opposition member and shadow finance minister:

The tweet kind of speaks for itself.

Tanzania does have a capital gains tax, and certainly does "deserve" it, though the government has been in court to try and levy it on the Mantra transaction, which concerns a uranium mine. As Bloomberg noted last year:
"The East African nation’s government is currently in court seeking $196 million in capital gains tax following Moscow-based ARMZ Uranium Holding Co.’s acquisition last year of Perth, Australia-based Mantra Resources Ltd., whose Tanzanian unit owns the Mkuju River uranium project. The tax was imposed based on the fact the mine is sited on land in Tanzania, according to the revenue authority.

Tanzania changed the tax laws to include gains made from selling shares or securities in a local company “to counteract the current tax avoidance practice of selling local companies through overseas holding companies,” according to the Finance Act 2012, signed by Finance Minister William Mgimwa on June 13."
Zitto Kabwe has been rather active on this issue, and rightly so.

Update: a new tweet, since this was published: 


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