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 January 15 to February 5, 2021. It will require approximately 25 hours of work on your part. In addition, you will benefit from a personalized follow-up from the various trainers. Apply before December 7, 2020. The price is 450 euros. A MEAE scholarship may be granted upon selection of applications. Only 30 places are available.
Simulations are now available for the year 2019. These simulations make it possible to estimate the mineral resource rent sharing accruing to the State, i.e. the average effective tax rate (AETR), by applying a country's tax legislation to a mine representative of African gold mines.
Of the 22 countries in the sample, 6 experienced a change in their AETR in 2019. In Benin, Chad, Cote d'Ivoire and Mali, AETRs are increasing. While in Mauritania and Zimbabwe, AETRs are declining. However, variations in AETRs are fairly small, except in two countries where they may be particularly large. In Cote d'Ivoire, the elimination of the corporate tax exemption and the minimum tax exemption leads to an increase in the AETR of up to 8.6% for a high-grade mine and a price of gold set at $1,500/oz. In Zimbabwe, the introduction of a variable mining royalty rate based on the price of gold decreases the AETR by up to 26% for a low-grade mine and a price of gold set at $1,100/oz. Note that in Gabon, the coming into force of the new mining act did not result in a change in the AETR because mining taxation remained virtually unchanged.
Updated tax data for 2019 are now available for Nigeria, Sierra Leone and Tanzania.
In Nigeria, mining taxation has not changed. In Sierra Leone, taxation has also not been amended either (Finance Act, 2019, No. 2 of 2019). In Tanzania, the new version updated to 2018 of the mining act has been published (Mining Act, 2010, No. 14 of 2010, amended by Finance Act, 2018, No. 4 of 2018) and the withholding tax on income from the sale of mineral has been repealed (Written Laws (Miscellaneous Amendments) (No. 2) Act, 2019, No. 6 of 2019).
The mining sector is an important contributor to tax revenues in many African countries. In 2015, the extractive sector accounted for more than 20% of the total revenues of nine countries on the continent. Mining tax systems must then both attract investors and ensure sufficient revenues for governments. Following the increase in commodity prices in the second half of the 2000s, most African countries reformed their mining laws in order to capture a larger share of the rent generated by mining companies. This trend continues: mining royalty rates are rising, mineral resource rent taxes are reappearing, and free equity for the state is becoming more and more common.
Updated tax data for 2019 are now available for Congo, Mali and Mauritania.
In the Republic of the Congo, mining taxation has not changed (Act No. 40-2018 of 28 December 2018). In Mali, a new Mining Act has been adopted (Ordinance No. 2019-022/P-RM of 27 September 2019). However, since its entry into force dates from the end of 2019, it will not appear in the database until 2020. In Mauritania, a new General Tax Code has been adopted (Act No. 2019-018 of 29 April 2019). The rate of corporate minimum tax has been reduced to 2%. The value added tax rate has been increased to 20% for petroleum products.