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Mining Taxation; An Application to Mali

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  • Saji Thomas

Abstract

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.

Suggested Citation

  • Saji Thomas, 2010. "Mining Taxation; An Application to Mali," IMF Working Papers 10/126, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:10/126
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=23859
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    References listed on IDEAS

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    1. Heaps, Terry, 1985. "The taxation of nonreplenishable natural resources revisited," Journal of Environmental Economics and Management, Elsevier, vol. 12(1), pages 14-27, March.
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    Cited by:

    1. Céline DE QUATREBARBES & Bertrand LAPORTE, 2015. "What do we know about the mineral resource rent sharing in Africa?," Working Papers 201509, CERDI.
    2. 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.
    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.
    4. Ousman Gajigo & Emelly Mutambatsere & Guirane Samba Ndiaye, 2012. "Working Paper 147 - Gold Mining in Africa-Maximizing Economic Returns for Countries," Working Paper Series 378, African Development Bank.

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