Mining Taxation: An Application to Mali

 
Author/Editor: Thomas, Saji
 
Publication Date: May 01, 2010
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: Mali’s gold sector is an enclave with weak forward and backward linkages with the rest of the economy. Given the predominance of the fiscal transmission channel, it is important that the design of the mineral tax regime gives the state a fair share of the benefits. Using optimal control theory, this paper estimates that the optimal royalty tax in Mali is about 3.5 percent. By reducing the royalty rate from 6 percent to 3 percent, Mali’s mining code broadly ensures that the risk is shared between the state and mining companies, provides sufficient incentives to attract new exploration, and is comparable to the fiscal regimes in other sub-Saharan African countries in its mix of tax instruments and tax structure.
 
Series: Working Paper No. 10/126
Subject(s): Economic models | Fiscal policy | Gold | Mali | Mining sector | Natural resources | Tax administration | Taxation

Author's Keyword(s): Gold | mining | taxation | Mali
 
English
Publication Date: May 01, 2010
Format: Paper
Stock No: WPIEA2010126 Pages: 23
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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