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Tag Archives: Finance Taxation and investment

Treasury bonds oversubscribed‏

HIGH demand from investors greeted the second 10-year treasury bonds attracting bids almost two times the amount offered to the market for bidding, thus ending up the
show overly subscribed.

The first 10-year treasury bonds auctioned on February, this year, attracted few bids
from investors ending the show under subscribed.

Funds raised from the sale of the long-term debt government securities are targeted to finance development projects like road and railway infrastructures that are necessary cutting down cost of transport.

Some of the key investors in government securities include pension funds, insurance firms, some microfinance companies and few commercial banks.

The second 10-year treasury bonds was auctioned last week and is expected to mature in
April 2026. It attracted bids 105.14/- compared to 49.20/- offered for bidding.

The Bank of Tanzania (BoT) auction summary shows, however, that the government retained only 21.70bn/- which is far below even the amount sought to be raised.

The weighted average yield to maturity increased slightly to 18.84 per cent compared to
18.82 per cent of the session held in February, this year.

The weighted average coupon yield also made slight increase to 17.03 per cent
compared to 17.00 per cent of the previous session.

The weighted average price for successful bids declined to 67.14 compared to 67.26.

Only seven bids that were received out of 75 emerged successful. The highest bid offered at the auction was 69.36 while the lowest is 57.50; the minimum successful bid/100 was 67.01.

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Acacia Mining to pay $20m in corporate tax in 2016‏

ACACIA Mining PLC is to pre-pay 20 million US dollars in corporate taxes this year after signing a Memorandum of Understanding with the Tanzania Revenue Authority (TRA) last month in Dar es Salaam.

According to the Acacia’s CEO, Bradley Gordon, this proactive move was initiated by Acacia Mining PLC in recognition of the time the company has been operating in the country.

Acacia Mining, which entered the Tanzania mining sector as Barrick and later as African Barrick Gold 15 years ago has been making profit, according to Mr Gordon, in his internal communication to Acacia staff at the weekend.

However, much as the company has in most cases declared net profit across the mines it owns the fact of the matter is it has not yet recouped the USD 3.8bn it has invested into building and developing the three mines it owns.

Under Tanzanian mining law and the terms of the Mineral Development Agreements between Acacia Mining PLC and the government any profit made is used to offset the initial investment and therefore during that period the company is not required to pay any corporate tax.

Mr Gordon says in elaborating the issue of profit that “when running a business one needs to first exclude all costs from your income before you can declare a profit – the cost in this case is the initial capital cost that has been invested to develop the mines”.

“Whilst we make net profits, these are not taxable and our current projections are we aren’t due to pay corporate taxes until 2018”, he says.

According to Mr Gordon, the fact that the MOU between Acacia and TRA has been signed and has been recognised as a pre-payment by all parties makes it clear that in the TRA’s opinion, no corporate tax is currently owed by Acacia and therefore none has been evaded.

In its recent ruling, the Tax Revenues Appeals Tribunal (TRAR) accused the gold mining giant of running a sophisticated tax evasion scheme in the country.

Acacia has since appealed to the Court of Appeal against the ruling asserting that the company’s financial reports conformed to international best practices and were audited by global accounting firms and government organisations.

 

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Money-Savers That Turn Into Money-Wasters

Frugal living has become the mantra for people  since the rise of costs of living and Great recession started,  although some of people have been wisely frugal for their whole lives. However,  all money-saving tips are not equal. Sure, taking your lunch to work is a quick ways to save about Tshs. 5,000 to Tshs. 10,000  every weekday, but some other  methods for saving your pennies could end up costing you more than you  realize.

Skimping or Cheating on  Insurance
Before you cancel your insurance policy, you need to think  hard about the consequences. A damaged third part insured vehicle or a damaged home could cost a  lot more than the money you save on your insurance premiums. Raising your  deductible through a bank could be a better way to save, but make sure you can really pay that  deductible without incurring costly debt and bank charges. 
Buying  Things Just Because They’re on Sale
Frugal shoppers live for sales  and discount coupons, but don’t get so caught up in the sale that you end up  buying things you don’t need. Stock up on items you really use when they’re on  sale, but never buy something you wouldn’t purchase if it wasn’t on sale. You’ll  end up with a houseful of unwanted items and then may not have the money  available for something you really need. Ladies you know what I mean, we ran to buy discounted shoes and clothes that we do not even need.
Driving Extra for a  Discount
Sometimes you can’t see the forest because of the trees. If  you are focused so much on saving a few shillings per litre of gas, using a  coupon at a distant store or finding a better price at a store 20 miles away  defeats the purpose. Don’t forget to calculate how much you are spending on the  extra gas needed to get there. You’re also adding miles to your possibly  overworked car. A friend of mine drive all the way to town from Mikocheni to buy Us dollars for her DSTV bill because she claims DSTV exchange rates are bad, by a 5 shilling per dollar, you are driving to town to save TShs.400/- for a Usd 80 monthly DSTV bill. Not so clever!
Skipping  Car Maintenance
Car maintenance is one expense many people like to  skip, but the lack of routine maintenance can end up costing thousands of shillings in car repairs. You may even have to replace your damaged  car.
Not Funding Your  Retirement Account
If you’re scrimping and living from paycheck to  paycheck, the idea of skimming money off that check for a far-off retirement can  be daunting. We all know the Social Security fund  saga going on in our country.
Think about this: if you put away a few shillings everymonth for  years, those shillings will eventually turn into thousands. Plus, you may be  reducing your tax burden by using pre-tax shillings for the social security contribution (Employee’s share of contribution). If you  have an employer who’s matching your contributions you are throwing money away  by not at least saving the maximum match amount.Employer might convice you to get more by avoiding NSSF he is saving while you are losing his part of contribution.

 

Buying Cheap  Items

Cheap clothes, cheap shoes, cheap hardware items and cheap  electronics are all readily available, but if you find yourself replacing them  often you may end up spending more money than if you had bought a good quality  item in the first place. Your better choice is to look for good quality items on  sale. Chinese items are playing a big part into this category! selling good looking bad quality items at a lower price!

 
Living Cash Poor
If you try to  save money by keeping only a small amount of cash in your wallet, you may end up  wasting money on ATMs. If you go to your bank and avoid ATM fees, that’s fine,  but many people end up spending around Tshs. 5000 every few days to pull out Tshs. 50,000 out of  their accounts.
Buying the  Wrong Groceries
While bulk grocery shopping can seem like a great  bargain, if you end up throwing away tomatoes that’s gone bad, you’ve  simply wasted money and food. Some people skip buying expensive fruits and  vegetables, but they could pay for that later on because they’ll need extra  vitamins and possibly have health issues.
The Bottom  Line While saving money on small things can add up to big benefits,  make sure the initial savings won’t result in unforeseen consequences in the  long run.
MF
 
 

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DSE to Benefit from SADC Countries Linking Stock Exchanges

THE Committee of Southern Africa Stock Exchanges says it will explore technological ways of linking trading and order systems of Sadc stock markets, committee chairperson Mrs Beatrice Nkanza has said.

This would help to increase the effectiveness of Sadc’s 10 stock exchanges including DSE.

Other CoSSE members apart from  Dar es Salaam Stock Exchange of Tanzania are Botswana Stock Exchange, Malawi Stock Exchange, Stock Exchange of Mauritius, Bolsa de Valores de Mozambique, Namibian Stock Exchange, South Africa’s JSE Ltd, Swaziland Stock Exchange, Zambia’s Lusaka Stock Exchange, and the Zimbabwe Stock Exchange.

Mrs Nkanza, who is also the chief executive of Lusaka Stock Exchange, said the committee was working closely with various Sadc institutions to support development of regional systems, including payment and was expected to boost visibility of trading data and enhance its joint website.

The Dar es Salaam Stock Exchange (winner of The Best Sustainable Stock Exchange of the Year 2011, Africa” by the World Finance ) have joined nine other stock exchanges in the Southern African Development (SADC) to adopt a digital platform. This will hopefully increase productivity and efficiency for smooth functioning and growth of market operations in completing cross border transactions.

Technology is opening doors and is the basis for changes in investor behavior and expectations. Considering the number of companies in Dar es Salaam there aren’t anywhere as many listed on the Dar es Salaam Stock Exchange.

Through meticulous planning and a well thought out implementation of the process, there are numerous benefits to listing your company on the stock exchange. For example, it creates a market for the company’s shares enhancing the status and financial standing of your company.
You increase market exposure, public awareness and interest in the company along with your services and products. It boosts the companies’ corporate profile as there will be an added element of trust and credibility.

 

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