Govt keen on mining legislation

The government wants to introduce a mining tax law so that it can ably tap more tax revenues from the sector, lawmakers heard last week.This came about as officials in the Ministry of Environment and Natural Resources (Minirena) and affiliated agencies appeared before the Chamber of Deputies’ Committee on Budget and National Patrimony, to defend the ministry’s 2012/13 budget allocations.Minister Stanislas Kamanzi said: “Because of the nature of the contracts earlier negotiated between mining companies and the government, we find that the money paid for taxes is very little”.“We are looking at new contracts that will guide us how we can get taxes in a manner that does not only depend on what the miners declare. I think it will help us boost the government’s revenues from the sector.”Wondering what foolproof mechanisms will be used to make out the exact amount of mineral earnings companies make, Abbas Mukama, the vice-chairperson of the committee, told the minister that the mining companies are shrewd and could be declaring less than what they produce.Kamanzi answered that pertinent mechanisms were being considered, together with experts “to help find a good system of handling this and being able to have the necessary control.”On Sunday, the Director General of the Rwanda Geology and Mines Authority (OGMR), Dr. Michael Biryabarema, told The New Times, that mining companies currently pay income tax just like any other businesses in the country. “There are plans to establish a tax law for the mining sector so that it can be more meaningful and so as to get some money from the sector. It is about making improvements in the fiscal regime which already has different types of taxes,” Dr. Biryabarema said, stressing that in the process, the government is being “careful not to discourage investments in the sector”.Biryabarema added that “cheating has not been established in the industry.”According to the Central Bank’s most recent monetary policy and financial stability statement released in February, exports in 2011 were driven by minerals and export crops, as Rwandan exports recorded strong performances, increasing both in value and volume by 52.8 percent and 48.4 percent respectively between 2010 and 2011.It adds that exports are still less diversified and dominated by traditional export products such as coffee, tea and minerals, which represented 74.8 percent of total export earnings in 2011.The value of major mineral exports was USD 151.4 million representing 39.1 percent of total export earnings, while coffee and tea amounted to USD 138.5 million, about 35.7 percent.The exports in the mining sector recorded a significant improvement in 2011 compared to the previous year mainly driven by the overall increase in international prices of the major minerals exported by Rwanda, namely tin, coltan and wolfram, reads part of the monetary policy and financial stability statement.The Central Bank points out that re-export products slightly rose by 3.8 percent in value while increasing highly by 174.0 percent in volume, on account of petroleum products which represented 84 percent of total volume of re-exports in 2011.Rwanda’s main re-exports include tin, coltan, wolfram, other minerals, petroleum products, machines and engines.The Rwanda Revenue Authority (RRA) early this month announced a 20 percent rise in tax collection for the previous nine months. RRA Commissioner General, Ben Kagarama, told a news conference that the institution collected Rwf 419 billion between July 2011 and March 2012.