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Gabon adopted a new mining act in 2019 (Act No. 037/2018 of 11 June 2019). However, the tax system applicable to holders of large-scale mining licenses has changed very little. The mining royalty rate remains fixed in the mining agreement. For precious substances, this rate must always be between 5% and 8%. The corporate income tax rate indicated in the mining act corresponds to the standard rate of 30%. However, the finance act, 2019, reiterates the higher rate of 35% for the mining sector. These measures therefore do not change 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) remains fixed at 46%.

The legal and tax database is expanding to its first Portuguese-speaking country: Angola.
In Angola, the Mining Act in force dates from 2011 (Law No. 31/11 of 23 September 2011). Gold is considered a strategic mineral. The mining royalty rate for this precious metal is 5%. The corporate income tax rate, set at 30% for other companies, is reduced to 25% for mining companies. From the Angolan tax system, it is possible to estimate the overall tax burden on a mining company. For a representative mine with an average grade (3g/t) and a gold price set at $1250/oz, the average effective tax rate (AETR) calculated is 58%.

Would you like to learn about the taxation of the mining sector in Africa and learn how to model rent sharing? During the confinement, Ferdi opens its training on mining taxation to 10 participants, free of charge, to allow you to make the most of this time, despite the difficult circumstances related to the Covid-19 epidemic.
This distance training will take place from 8 to 26 April 2020. It will require approximately 9 hours of work. In addition, you will benefit from a personalised follow-up by the various trainers. Submit your application before April 5, 2020! Only 10 places are available.

Updated tax data for 2019 are now available for Benin, Guinea and Kenya.
In Benin, the conditions for interest deductibility have been tightened by the Finance Act, 2019 (Act No. 2018-39 of 28 December 2018). In Guinea, the minimum turnover tax rate, which had been reduced to 1.5% in 2018, was restored to 3% (Act No. 2018-069 of 26 December 2018). In Kenya, mining taxation has not changed (Act No. 10 of 2018).

In Benin, the Finance Act, 2019, tightened the conditions for interest deductibility (Act No. 2018-39 of 28 December 2018). To be deductible from the corporate income tax base, interest paid to business partners now have to meet four conditions: (1) not exceed the amount of share capital, (2) not exceed 30% of income before tax, interest, depreciation and provisions, (3) not exceed the average BCEAO rate plus three points, and (4) be paid within five years.