Mining taxation

Mining taxation refers to the taxes that apply to mining. It is often assumed that the taxating country aims towards a combination of high production and high taxes and thus the problem of mining taxation is that of achieving both.[1] Countries have tended to compete with low or favourable taxation to attract mining investment that in turn generate a taxation base.[2] It has been noted that in the last decade of the 20th century taxation methods and levels tended to became more uniform across countries in the world.[3] It is generally though that investment in mining activity is riskier than other types of business and this has led many countries to implement tax incentives.[4] Some of these incentives target taxation discounts related to mineral exploration and mine development, the first one carrying a lot of uncertainty and the second being usually a very costly investment.[4] Other areas targeted for tax discounts are machinery importation, relaxed or lack of export tariffs and tax benefits aiming to mitigate schocks from commodity price cycles.[5] Various countries such as Ecuador, Tanzania and the Philippines apply as of 2023 a policy of taxating profit.[6]

Historically and up to the present some states have sought increased earnings through state-owned mining companies (e.g. Codelco) rather than restricting their mining income to taxation.[7]

References

  1. ^ Wagner 2005, p. 198.
  2. ^ Wagner 2005, p. 199.
  3. ^ Otto 2001, p. 1.
  4. ^ a b Otto 2001, p. 4.
  5. ^ Otto 2001, p. 5.
  6. ^ Readhead et al. 2023, p. 4.
  7. ^ Readhead et al. 2023, p. 5.

Bibliography

  • Readhead, Alexandra; Tarus, Viola; Lassourd, Thomas; Madzivanyika, Ezera; Schlenther, Bernd (2023). El futuro de la tributación de los recursos naturales: 10 ideas de política fiscal para movilizar los ingresos provenientes de la minería (PDF) (Report) (in Spanish). Instituto Internacional para el Desarrollo Sostenible & Foro Africano de Administración Tributaria. pp. 1–250.
  • Otto, James M. (2001). Fiscal Decentralization and Mining Taxation (PDF) (Report). The World Bank Group Mining Department. pp. 1–21.
  • Wagner, Gert (2005). "Un siglo de tributación minera". In Lagos, Gustavo (ed.). Minería y desarrollo (in Spanish). Santiago, Chile: Ediciones Universidad Católica de Chile. pp. 193–227. ISBN 956-14-0844-9.
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