ACACIA MINING HIT WITH USD190BN TAX BILL FROM TANZANIAN GOVERNMENT - FINANCIAL-24
Acacia Mining has been sent a tax bill from the Tanzanian authorities totalling around $190bn for unpaid tax and penalties from its Bulyanhulu and Buzwagi mines in the country, which the London-listed company disputes.
The Tanzania Revenue Authority sent a demand for $154bn and $36bn to Bulyanhulu Gold Mine Limited and Pangea Minerals Limited, the holding companies for the two mines, in reference to alleged under-declared export revenues.
The TRA's assessments claim a total of close to $40bn of alleged unpaid taxes and roughly $150bn of penalties and interest owed.
Acacia, which said it disputed these assessments, is considering all of its options and rights and will provide a further update in due course.
On 12 June, FTSE 250-listed was accused on by the government of operating in the country illegally, following two presidential mining committee reports that alleged the company had been understating its level of exports for several years to avoid "tens of billions of US dollars".
Acacia said on Monday that it "refutes each set of findings and re-iterates that it has fully declared all revenues" and is still yet to receive copies of the reports issued by either of the presidential committees.
Both subsidiaries, BGML and PML, have already referred these allegations to international arbitration.
The report from the second committee set up by Tanzanian President John Magufuli following the imposition of an export ban in March, accused the company of operating outside proper Tanzanian law and even of not being properly licensed to operate in the country.
Tanzania's parliament then voted through three new mining industry bills earlier, with Acacia earlier this month confirming parts of the legislation are now in force and being applied by Tanzanian authorities.
This has seen the company begin paying higher royalties to the Tanzanian government for its production of gold and copper of 6%, up from 4%, plus a further 1% clearing fee on exports.
Acacia's shares had already been under extra pressure on Monday on news that it could soon face a lawsuit in the UK from relatives of people who died at one of its mines in the east African country.
Acacia, said newspaper reports, could soon face compensation claims from a group being represented by law firm Deighton Pierce Glynn.
Shares in the company fell 25% by the close on Monday to 184.5p, their lowest since late 2015.
DigitalLook
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