This paper analyses the factors that reduce the mineral sector’s contribution to the Tanzanian
government’s revenue. This sector accounts for nearly half of the country’s exports and places it among
Africa’s largest exporters. Yet, ordinary Tanzanians have seen little benefit from their country’s exports
boom. This is partly because the government has enacted tax laws that are, as we shall see, overly
favorable to multinational mining companies, and partially due to the business practices of the companies
themselves. The situation is further exacerbated by these companies avoiding taxes altogether by
claiming losses. Nonetheless, they continue to invest in operations. Critics argue that the government fails
to capture a substantial amount of state revenue as a result of low royalty rates, unpaid corporate taxes
and tax evasion major gold mine operators. This paper argues that the Tanzanian government should
increase its involvement in the mining industry by entering into joint ventures with mining companies, or
by increasing its shares in them. Its involvement will result in an increase in tax and royalties collection.