Tanzania's President Magufuli vows to toughen tax evasion crackdown

DAR ES SALAAM, Feb 2 (Reuters) - Tanzanian President John Magufuli vowed on Thursday to toughen up a crackdown on tax evasion by big businesses including mining companies as the east African nation moves to boost domestic revenues.

Africa’s fourth-largest gold producer, Tanzania also has vast deposits of natural gas, coal, diamonds, uranium and gemstones.

While addressing members of the judiciary in Tanzania’s capital Dar es Salaam, Magufuli ordered the courts to enforce payment of tax claims worth more than 7.5 trillion Tanzanian shillings from big firms.

Magufuli launched a crackdown on graft and tax evasion when he took office in 2015 and has sacked dozens of senior public officials. Some businesses, though, say they have been unfairly hit with high tax bills.

Big firms are the main source of tax revenue for the government because Tanzania has a large informal economy that goes untaxed.

“It is unacceptable that an investor is extracting our minerals but doesn’t pay taxes. That investor was taken to court and lost both the case and the appeal, yet still refuses to pay the taxes,” Magufuli said.

He said that 7.5 trillion Tanzanian shillings worth of taxes were still unpaid by various firms even after the government won tax claim cases against them in courts and that this was hurting the east African nation’s economy.

Magufuli asked Tanzania’s judiciary to help stem corruption in the country, saying it was denying citizens access to justice.

“Some 28 magistrates were prosecuted (in Tanzania) last year for various criminal offences, mostly corruption, but all 28 of them were acquitted,” said Magufuli.

“It is hard to believe that all 28 of them were absolutely not guilty.”

Businesses in Tanzania often cite widespread corruption as one of the biggest obstacles to investment in the country. (Reporting by Fumbuka Ng’wanakilala; Editing by Elias Biryabarema and Hugh Lawson)