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CET Concludes Major Study In Mining Taxation

Feb 09, 2017

The World Bank Group (WBG) and the Centre for Exploration Targeting (CET)  have recently published a comprehensive technical  guidebook targeted to mining tax professionals entitled “Transfer Pricing in Mining with Focus on Africa: A Reference Guide for Practitioners”. This publication and a related less technical Briefing Note, targeted at uninitiated stakeholders (e.g. politicians, industry executives, media, NGOs etc.), are the outputs of an extensive program of research in mining taxation designed to strengthen related policy formulation and  administrative and collection frameworks in developing countries, particularly in Africa.
 
This study was motivated by the recognition that, with increasing globalisation and corporate structure optimisation of multinational enterprises (MNEs), mispricing of the transfer prices applied to cross-border transactions between related entities of the same MNE group has emerged as one of the most significant source of tax avoidance, particularly in mineral-rich developing countries lacking the administrative capacity to carry out effective audits. It is estimated that if institutional strengthening were to result in effective collection of the correct amount of mining taxes in Africa, it could offset the current significant injection of foreign aids to the continent.

This program of research was carried out by a group of Australian and international mining governance and taxation specialists directed by Prof. Pietro Guj assisted by Dr. Bryan Maybee, a CET member from Curtin Graduate School of Business’ (GBS) Mineral and Energy Economics Department (MEED).

The study was initially commissioned and funded by WBG and by the Australian Department of Foreign Affairs and Trade through their sponsorship of the International Mining for Development Centre (IM4DC), a joint venture between the University of Western Australia and Queensland University, now represented by the Mining and Energy for Development Alliance (MEfDA).

Recent funding from the German aid agency GIZ  has also allowed the compilation of an extensive set of training materials on transfer pricing in mining to support international workshops to be conducted during 2017 in Africa and Latin America.  Prof. Guj and Dr. Maybee will be playing a key role in the development, organization and delivery of the technical content of these workshops to be funded by the WBG and the UN, while MEfDA will take care of the related logistical and support aspects.

The Transfer Pricing Guidebook can be downloaded here

The Briefing Note can be found here

Digital copies of these two publications will be available on the World Bank Group’s web site and will soon be uploaded on the CET’s and MEfDA’s sites.

[1] CET is a joint venture between the University of Western Australia and Curtin University supported by the mining industry.

[2] Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH