Thursday, June 17, 2010

Gold mining in Mali: Who really profits?

From Eurodad, a useful article on mining taxes whose first paragraph starts like this:

"A new International Monetary Fund (IMF) working paper entitled “Mining Taxation: an application to Mali” analyses the structure of the mining taxation system in Mali. It follows the regressive path set forth by the World Bank, consisting of attracting Foreign Direct Investments (FDI) by lowering royalty taxes in the gold mining sector at the expense of lower government revenues collected through these royalties."

Following IMF recommendations, Mali’s government decided to reduce the royalty rate applied to gold mining companies from 6% to 3% in order to encourage investment in this sector. Read on.

And bear in mind the generic points about taxing rents, which we have blogged earlier several times, such as here.

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