TheTanzanian government is likely to announce new taxes for mining companies whenthe country's Finance Minister Mustafa Mkulo presents his 2008/2009 nationalbudget next month.

The east African country, which is Africa's third largest producerof gold, has been contemplating raising mining taxes and royalties for a longtime despite calls by the Tanzania Chamber of Mines not to raise them. Thechamber says further taxation of the mining industry will reduce the country'scompetitiveness in attracting foreign mining companies.

But Finance Minister Mkulo told Bloomberg that Tanzania needs to change thecurrent framework in which most mining companies operating in the country areexempted from payments, including a 30 percent corporate tax and customsduties.

We can increase revenue from mining companies by 10 times if they all paytaxes. The companies agree that there are anomalies and they are working withus. We are not going to chase any company away, Mkulo currently attending anAfrican Development Bank meeting in Mozambique said.

Gold miners pay a three percent royalty on profit while diamond and gemstonesminers are levied five percent.

Tanzanian President Jakaya Kikwete set up a committee late last year to reviewthe mining industry. The committee which was headed by Judge Mark Bomani wastasked to gather views from both inside and outside the country over legalprovisions that need to be changed so that the mining sector could benefitTanzanians more.

In addition, the committee was charged with the duty to review all miningcontracts, analyse the taxation system employed in the mining industry andreview the system for supervision of major mining activities by the government.

The committee finished working on the review and presented its findings to thePresident early this month. However Mkulo said he hadn't yet seen therecommendations from the tax review committee. Kikwete is expected to presentthe recommendations for discussion by his cabinet later this month.