Taxation of mining industries

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Update 2017 and 2018: South Africa, Tanzania and Zimbabwe

2019-10-01

Updated tax data for 2017 and 2018 are now available for South Africa, Tanzania and Zimbabwe.
In South Africa, withholding tax on dividends has increased from 15% to 20% (Act No. 17 of 2017) and the VAT rate has been increased from 14% to 15% (Act No. 21 of 2018). In Tanzania, the Mining Act has been revised (Act No. 7 of 2017). Mining royalty rates have been increased. The free equity for the State is now set at 16%. The fixed fees and the surface fees were also amended (Government Notice No. 1 of 2018). In Zimbabwe, mining taxation has not changed (Act No. 2 of 2017 and Act No. 1 of 2018).

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Revision of the Tanzanian Mining Act: what changes?

2019-09-30

The Tanzanian Mining Act was revised, mainly in 2017 (Act No. 7 of 2017). Mining royalty rates have been increased from 4% to 6% for gold. In addition, the free equity for the State in the capital of the mining company, the rate of which had hitherto been negotiated between the parties, is now set at 16%. Finally, the amount of fixed fees and surface fees were reduced in 2018 (Government Notice No. 1 of 2018). These new measures concerning the mining royalty and the State equity significantly increase the tax burden applicable to gold mining companies. For a representative medium grade mine (3g/t) and a gold price of $1250/oz, the average effective tax rate (AETR) increases from 41% to 53%.

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Update 2017 and 2018: Kenya, Nigeria and Sierra Leone

2019-09-03

Updated tax data for 2017 and 2018 are now available for Kenya, Nigeria and Sierra Leone.
In Kenya, a new Mining Act was adopted in 2016 (Act No. 12 of 2016) and supplemented by 14 regulations in 2017. In Nigeria, mining taxation has not changed. In Sierra Leone, an Extractive Industries Revenue Act was passed in 2018. It reviews both mining and oil taxation.

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New Kenyan Mining Act: what changes?

2019-09-02

Kenya adopted a new Mining Act in 2016 (Act No. 12 of 2016), supplemented by 14 regulations in 2017. However, there is only one important change to note because most of the mining tax provisions are located in the Income Tax Act. The State now requires a free participation of 10% in the capital of industrial mining companies. This measure therefore increases the tax burden applicable to gold mining companies. For a representative medium grade mine (3g/t) and a gold price of $1250/oz, the average effective tax rate (AETR) increases from 41% to 48%.

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Sierra Leonean Extractive Industries Revenue Act: introduction of a mineral resource rent tax and a stability clause

2019-09-01

Sierra Leone adopted the Extractive Industries Revenue Act, 2018. It reviews both the country's mining and oil taxation. Concerning mines, the mining royalty is increased to 8% for high-value gemstones. Loss carry forward is more flexible. A mineral resource rent tax and a stability clause are inserted. However, the tax burden applicable to gold mining companies remains stable. For a representative medium grade mine (3g/t) and a gold price of $1250/oz, the average effective tax rate (AETR) remains at 42%.

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