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Rent sharing and progressivity of tax regimes in the mining sector: An analysis of 21 African gold-producing countries
[Partage de la rente et progressivité des régimes fiscaux dans le secteur minier : une analyse sur 21 pays africains producteurs d'or]

Author

Listed:
  • Bertrand Laporte

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique)

  • Céline de Quatrebarbes

    (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)

  • Yannick Bouterige

    (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)

Abstract

In the mining sector, governments must be able to reconcile two objectives: to attract foreign direct investment to exploit the resource and to capture a sufficient share of the mining rent to finance development. This problem has been known for a long time, and it certainly raises the question of the sharing of the mining rent between the actors; however, it should also highlight the importance of the progressiveness of tax regimes. Progressive taxation is one of, if not the main, the criteria that could provide lasting reassurance for investors and guarantee that the State can capture a "fair" share of the rent generated by the sector. Though several studies differentiate between tax instruments according to their economic effects, none seek to assess the ability of African mining regimes to adapt the tax burden paid by the investor to the profitability of projects. The tax database made available by the Foundation for International Development Studies and Research (FERDI), in partnership with the Centre for International Development Studies and Research (CERDI) and the International Centre for Taxation and Development, lists the 12 main taxes and duties that have applied under the legislation since 1980 to industrial companies in the gold sector in 21 African countries. When applied to the economic data of representative African mines, this database allows researchers and analysts to build indicators to identify the tax regimes most likely to reconcile the actors in the sector, while taking into account their complexity. The results of our analysis show 1) that the share of mining rent received by governments is very heterogeneous between countries, and 2) that "innovations" in terms of tax design have only mitigated, in the best of cases, the regressiveness of tax systems.

Suggested Citation

  • Bertrand Laporte & Céline de Quatrebarbes & Yannick Bouterige, 2019. "Rent sharing and progressivity of tax regimes in the mining sector: An analysis of 21 African gold-producing countries [Partage de la rente et progressivité des régimes fiscaux dans le secteur mini," Working Papers halshs-02103047, HAL.
    • Handle: RePEc:hal:wpaper:halshs-02103047
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02103047
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    References listed on IDEAS

    as
    1. Smith, James L., 2013. "Issues in extractive resource taxation: A review of research methods and models," Resources Policy, Elsevier, vol. 38(3), pages 320-331.
    2. Celine de Quatrebarbes & Bertrand Laporte, 2015. "What do we know about the mineral resource rent sharing in Africa?," CERDI Working papers halshs-01146279, HAL.
    3. Laporte, Bertrand & de Quatrebarbes, Céline, 2015. "What do we know about the sharing of mineral resource rent in Africa?," Resources Policy, Elsevier, vol. 46(P2), pages 239-249.
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    13. Bertrand Laporte & Céline De Quatrebarbes, 2015. "What do we know about the sharing of mineral resources rent in Africa?," Post-Print halshs-01225791, HAL.
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