IDEAS home Printed from https://ideas.repec.org/p/col/000089/012562.html

Mining Taxation in Colombia

Author

Listed:
  • Duanjie Chen
  • Guillermo Perry

Abstract

This paper assesses the current Colombian mining tax and royalty regime in terms of efficiency, competitiveness and revenue performance vis-a-vis other relevant mining countries. It then discusses the convenience of introducing a Resource Rent Tax (RRT) to new mining projects (together with a reduced common royalty rate for all minerals) and simulates its potential effects on efficiency and revenue performance. In particular, the paper examines the interactions between a RRT, royalties and the Corporate Income Tax under different RRT designs, tax rates and capital return allowances. It also discusses the convenience of project by project against sectorial ring-fencing. It concludes with a blueprint for reform as well as political economy and administrative considerations for the specific case of Colombia.

Suggested Citation

  • Duanjie Chen & Guillermo Perry, 2010. "Mining Taxation in Colombia," Documentos CEDE 12562, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:012562
    as

    Download full text from publisher

    File URL: https://repositorio.uniandes.edu.co/bitstream/handle/1992/8538/dcede2014-49.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Duanjie Chen & Jack Mintz, 2012. "Capturing Economic Rents from Resources through Royalties and Taxes," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 5(30), October.
    2. (IFS), Institute for Fiscal Studies & Mirrlees, James (ed.), 2011. "Tax By Design: The Mirrlees Review," OUP Catalogue, Oxford University Press, number 9780199553747.
    3. James Otto & Craig Andrews & Fred Cawood & Michael Doggett & Pietro Guj & Frank Stermole & John Stermole & John Tilton, 2006. "Mining Royalties : A Global Study of Their Impact on Investors, Government, and Civil Society," World Bank Publications - Books, The World Bank Group, number 7105, April.
    4. Duanjie Chen & Jack Mintz, 2013. "Repairing Canada's Mining-Tax System to be Less Distorting and Complex," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 6(18), May.
    5. Mintz, Jack M, 1990. "Corporate Tax Holidays and Investment," The World Bank Economic Review, World Bank, vol. 4(1), pages 81-102, January.
    6. James Otto & Craig Andrews & Fred Cawood & Michael Doggett & Pietro Guj & Frank Stermole & John Stermole & John Tilton, 2006. "Mining Royalties : A Global Study of Their Impact on Investors, Government, and Civil Society, Appendixes," World Bank Publications - Books, The World Bank Group, number 7136, April.
    7. repec:dbl:dblwop:221 is not listed on IDEAS
    8. Boadway, Robin & Keen, Michael, 2009. "Theoretical Perspectives on Resource Tax Design," Queen's Economics Department Working Papers 273692, Queen's University - Department of Economics.
    9. Gordon, Roger H & Wilson, John Douglas, 1989. "Measuring the Efficiency Cost of Taxing Risky Capital Income," American Economic Review, American Economic Association, vol. 79(3), pages 427-439, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vining, Aidan R. & Moore, Mark A., 2017. "Potash ownership and extraction: Between a rock and a hard place in Saskatchewan," Resources Policy, Elsevier, vol. 54(C), pages 71-80.
    2. Frestad, Dennis, 2010. "Corporate hedging under a resource rent tax regime," Energy Economics, Elsevier, vol. 32(2), pages 458-468, March.
    3. Hilson, Gavin & Sauerwein, Titus & Owen, John, 2020. "Large and artisanal scale mine development: The case for autonomous co-existence," World Development, Elsevier, vol. 130(C).
    4. Hansen, James & Gross, Isaac, 2018. "Commodity price volatility with endogenous natural resources," European Economic Review, Elsevier, vol. 101(C), pages 157-180.
    5. 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 minier : une analyse sur 21 pays africains producteurs," CERDI Working papers halshs-02103047, HAL.
    6. Rudy Laguna Inocente & Álvaro Orozco Ávalos & Madeherick Bejarano Pacheco, 2018. "Mining investment and a fiscal regime that promotes the investment: an inter-temporal model," Revista de Análisis Económico y Financiero, Universidad de San Martín de Porres, vol. 1(01), pages 25-41.
    7. Hagspiel, Verena & Jonsbråten, Ådne & Lesage, Maxime & Minge, Filip Fremo & Mustafina, Farida, 2025. "Assessing the impact of tax systems on investment incentives in future marine minerals projects on the Norwegian Continental Shelf," Journal of Commodity Markets, Elsevier, vol. 39(C).
    8. Figueroa B., Eugenio & Orihuela R., Carlos & Calfucura T., Enrique, 2010. "Green accounting and sustainability of the Peruvian metal mining sector," Resources Policy, Elsevier, vol. 35(3), pages 156-167, September.
    9. Celine de Quatrebarbes & Bertrand Laporte, 2015. "What do we know about the mineral resource rent sharing in Africa?," CERDI Working papers halshs-01146279, HAL.
    10. Zsolt Bihary & P'eter Cs'oka & P'eter Ker'enyi & Alexander Szimayer, 2019. "Self-respecting worker in the precarious gig economy: A dynamic principal-agent model," Papers 1902.10021, arXiv.org, revised Aug 2025.
    11. Giorgio Brosio & Juan Pablo Jiménez, 2012. "The intergovernmental allocation of revenue from natural resources: finding a balance between centripetal and centrifugal pressure," Chapters, in: Giorgio Brosio & Juan P. Jiménez (ed.), Decentralization and Reform in Latin America, chapter 10, pages iii-iii, Edward Elgar Publishing.
    12. Banda, Webby & Kabwe, Eugie, 2019. "An integrated multiple criteria decision making framework for application in the evaluation of mineral taxation regimes," Resources Policy, Elsevier, vol. 62(C), pages 635-650.
    13. Castillo, Emilio & Hancock, Kathleen J., 2022. "Multiple streams framework and mineral royalties: The 2005 mining tax reform in Chile," Resources Policy, Elsevier, vol. 77(C).
    14. Christopher Hajzler, 2012. "Expropriation of foreign direct investments: sectoral patterns from 1993 to 2006," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 119-149, April.
    15. Rami Al Rawashdeh & Gary Campbell, 2024. "Mineral policy in MENA countries: the case of Jordan," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 37(1), pages 121-147, March.
    16. Elizabeth Wall & Remi Pelon, 2011. "Sharing Mining Benefits in Developing Countries," World Bank Publications - Reports 18290, The World Bank Group.
    17. Alberto Fonseca & Patricia Fitzpatrick & Mary Louise McAllister, 2013. "Government and voluntary policymaking for sustainability in mining towns: A longitudinal analysis of Itabira, Brazil," Natural Resources Forum, Blackwell Publishing, vol. 37(4), pages 211-220, November.
    18. Olav Lundstøl & Jan Isaksen, 2018. "Zambia's mining windfall tax," WIDER Working Paper Series wp-2018-51, World Institute for Development Economic Research (UNU-WIDER).
    19. Jack Mintz, 2022. "A Proposal for a "Big Bang" Corporate Tax Reform," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 15(7), February.
    20. Amos James Ibrahim-Shwilima & Hideki Konishi, 2014. "The Impact of Tax Concessions on Extraction of Non-renewable Resources:An Application to Gold Mining in Tanzania," Working Papers 1403, Waseda University, Faculty of Political Science and Economics.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000089:012562. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Universidad De Los Andes-Cede (email available below). General contact details of provider: https://edirc.repec.org/data/ceandco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.