The Ferdi provides the first legal and tax database that lists the tax regime applicable to industrial gold mines in 22 African producing countries since the 1980s and a simulation tool for sharing the mineral resource rent between State and investors.
The tools provided make it possible to: 1) understand the characteristics of the mining taxation, 2) know the evolution of the mining taxation, 3) compare the mining taxation between African countries, 4) compare mining taxation between projects of the same country, 5) assess the sharing of the mineral resource rent between State and investors.
Improving the mobilisation of domestic resources is a hight priority for African countries. The heavy dependence of these countries on the extractives industries implies understanding the mechanisms and consequences of the mining tax Regim applied in Africa on the development of the extractive industry as well as the public revenu collection.
Although several international institutions, non-governmental organisations and universities publish on this issue, data on mining tax Regim in Africa remains difficult to access. Thus, improving the transparency of information in the African mining sector has become a priority for the international community.
The database provided has three major innovations:
The database now concerns 14 French-speaking countries, 7 English-speaking countries and 1 portuguese-speaking country: Angola, Benin, Burkina Faso, Cameroon, Chad, Republic of the Congo, Democratic Republic of the Congo, Cote d’Ivoire, Gabon, Ghana, Guinea, Kenya, Madagascar, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, South Africa, Tanzania and Zimbabwe.
The database currently focuses on gold, that is exploited in 34 of the 54 African countries, making it the second larger producer in the world.
The information provided here is intended for researchers, States and public administrations, international institutions and all national and international stakeholders. The objective is to contribute to the improvement of public policies and the information of companies, with a goal of international development.
Full access to the legal and tax data of the website requires a subscription. The subscription is free for individuals or institutions that commit to make no commercial use. On the other hand, financial participation is requested from individuals or companies wishing to use the data for commercial purposes.
States have to arbitrate between the will to attract foreign investors and the need to increase public revenues. Applied to the economic data of a representative mine and associated with a cash flow model, this database offers the means for researchers and analysts to summarize the tax burden that should apply to mining companies in the African countries according to the legislation. The indicator calculated is the average effective tax rate (AETR), that represents the share of the mineral resource rent captured by the State on a mining project.
A very high AETR, near 100% or higher, should not be too strictly interpreted. It does not mean that the State manages to collect all of the rent; rather it means that the tax burden makes the mine economically unviable. This illustrates the significant impact of the tax system and the gold price on the profitability of a mining project.
The unprecedented historical depth of this database makes it possible to follow the evolution of the average effective tax rates since the 1990s in 21 African countries. This history shows the impact of the successive tax reforms decided by African States (rates, bases, calculation rules) to try to adapt to a context of instability of world prices.
Would you like to learn about the taxation of the mining sector in Africa and learn how to model mineral resource rent sharing? In partnership with the French Ministry of Europe and Foreign Affairs (MEAE), the IHEDD is opening a new session of its online training on modeling and mining taxation in Africa.
This distance training will take place from February 20 to April 10, 2023. It will require approximately 35 hours of work on your part. In addition, you will benefit from a personalized follow-up from the various trainers. Apply before January 16, 2023. The price is 450 euros. A MEAE scholarship may be granted upon selection of applications. Only 40 places are available.
Would you like to learn about fiscal design in the African extractive sector and reflect on the main risks and problems posed by the taxation of this sector (aggressive tax optimisation, indirect transfers, VAT credits, etc.)? In partnership with the French Ministry of Europe and Foreign Affairs (MEAE), the IHEDD is opening a new session of its online training on fiscal design in the extractive sector in Africa.
This distance training will take place from April 24 to May 22, 2023. It will require approximately 15 hours of work on your part. In addition, you will benefit from a personalized follow-up from the various trainers. Apply before March 20, 2023. The price is 450 euros. A MEAE scholarship may be granted upon selection of applications. Only 40 places are available.
Updated tax data for 2020 are now available for Guinea, Mali and Senegal.
In Guinea, there have been no significant changes to taxation (Act No. 51 of 2019). Mali adopted a new Mining Act in 2019 (Ordinance No. 22 of 2019), accompanied in 2020 by its regulations (Decree No. 177 of 2020). Important changes concern the corporate income tax, the ad valorem royalty and the surface royalty. For a mine representative of an average grade (3g/t) and a fixed gold price of $1,400/oz, the average effective tax rate increases from 47.7% to 51.6%. In Senegal, the minimum collection amount of 500,000 CFA francs, provided for in terms of minimum tax, has been repealed (Act No. 17 of 2019), due to its "confiscatory effect on small and medium-sized enterprises in a deficit situation".