DPG Monthly Meeting May 7 th, 2013 Presented by: TEITI Secretariat 1

Why Tanzania joined EITI Rules and Standards of EITI implementation Findings of 1 st and 2 nd TEITI Reports Conclusion: How EITI is a dynamic process 2 Presentation Outline

Sectoral reforms in Mineral sector that led to Mineral Policy 1997 and Mining Act 1998, and Regulations 1999 Reforms were aimed to attract investments in the mineral sector Ten years of implementing these reforms attracted at least 6 large scale operations. Public outcry compelled Govt to form various committees Bomani Committee (2008) advised Tz to join EITI 3 Why Did Tanzania Join EITI?

EITI and What it Entails 4

5 EITI Process Milestones

1 st TEITI Report published –February 2011; Validation report - May 2011; Decision on Tanzania Validation–August 2011; Meaningful progress but 5 indicators unmet (largely related to disclosure) Tz was given 18 months until February 2013 to work on unmet indicators. These were addressed in 2 nd TEITI Report 2 nd Report published in May Progress Made todate

1 st TEITI Report Key Findings Government receipts total Tzs 128.4bn Companies paymentsTzs bn Discrepancy of Tzs 46.5 bn –Royalty (solid minerals) = billion –Fuel levy = billion 8

Unresolved differences: 1 st Report In January 2012, the CAG issued a report that reduced the discrepancy to: US$ 326, on mineral royalties, TZS1.3 billion on PAYE (tax on employees salaries), TZS 0.5 on NSSF (social contributions), and TZS 0.3 billion on Skill Development Levy (SDL).

2 nd TEITI Report: Highlights 23 taxpayers selected (10 Taxpayers in 1 st Reconciliation) 21 taxpayers responded to the reporting request, 2 did not 2 taxpayers who did not respond paid TzS 30 billion to Govt TzS 419 billion reported receipts by Government TzS 424 billion reported payments by companies TzS 5.0 billion Net difference at end of reconciliation MSG to engage a consultant to further investigate this difference

Tanzania 2009/10 EITI Report

In September 2012, the Reconciler was able to reduce the net unresolved difference from TzS 5.0 billion to : TzS billion (government reported less than the companies reported to have paid); This represents 0.17% of the total final reported and reconciled government receipts. Unresolved differences- 2 nd Report

Comparisons of 1st and 2nd Reports

How EITI is a dynamic process A national Multi-Stakeholder Group (government, industry and civil society). An EITI report Findings are communicated to create public awareness and debate about how to manage and use of resources better. Production data Transfers to local government Social and infrastructure investments State Owned Enterprises (encouraged) Government publish receipts Companies publish payments Licenses & contracts Monitoring production Tax collection Revenue distribution Expenditure management Licensing information State ownership Contract transparency (encouraged)

Thank you