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Update 2017 and 2018: Madagascar, Mauritania and Senegal
Updated tax data for 2017 and 2018 are now available for Madagascar, Mauritania and Senegal.
In Madagascar, mining administration fees have been adjusted (Order No. 20173/2018 of 26 january 2018). In Mauritania, mining taxation has not changed (Act n°2017-004 of 19 January 2017 and Act n°2018-001 of 11 January 2018). In Senegal, a new Mining Act has been adopted (Act No. 2016-032 of 8 November 2016) and was supplemented by its regulation (Decree No. 2017-459 of 20 March 2017).
New Senegalese Mining Act: what changes?
Senegal has adopted a new Mining Act (Act No. 2016-032 of 8 November 2016). It aims to rebalance the sharing of the mineral resource rent in favour of the State. This new Act is part of the continuation of the reforms of the special regimes (Act n°2012-032 of 31 December 2012) and the concentration of tax measures in the General Tax Code (Act n°2012-31 of 31 December 2012). Fixed fees are increased, the surface fees is reintroduced and the mining royalty abandons the single rate (3%) for differentiated rates per ore (5% for gold). These measures therefore 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 50% to 53%.
Malagasy mining administration fees: why such frequent changes?
In Madagascar, mining administration fees are based on the area of mineral rights. They have two important particularities in relation to the surface fees of other countries: the taxation unit is an area of 0.390625 km² and the amount is adjusted on the Special Drawing Right (SDR) of the International Monetary Fund (IMF). Thus they are supposed to be revalued annually by order of the Minister of Mines. They have almost tripled since 2007.
Update 2017 and 2018: Gabon, Guinea and Chad
Updated tax data for 2017 and 2018 are now available for Gabon, Guinea and Chad.
In Gabon, a surveillance fee is now charged to holders of mineral rights, in addition to the ground fee (Act No. 021/2017 of 26 January 2018). In Guinea, after having been raised to 20% in 2016, the full VAT rate was restored to 18% in 2017 (Act L/2016/066/AN of 19 December 2016). In addition, the corporate income tax rate was reduced to 25% in 2018 (Act L/2017/059/AN of 12 December 2017). However, this reduction does not apply to mining companies, which remain subject to a rate of 30%. In Chad, a new Mining Act has been adopted (Ordinance No. 004/PR/2018 of 21 February 2018).
New Chadian Mining Act: what changes?
Chad has adopted a new Mining Act (Ordinance No. 004/PR/2018 of 21 February 2018). It introduces a rent tax of 50% and a free equity for the State in the capital of the operating company of 12.5%. In addition, the Finance Act, 2017, increased the amounts of fixed fees and ground fees (Act No. 033/PR/2016 of 31 December 2016). These measures therefore 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 44% to 71%.