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 policy formulation and tax administration 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. This is particularly the case 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 enforcement of existing laws and 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) Department of Mineral and Energy Economics Department (DMEE).
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).
The transfer pricing Guidebook will be formally launched by the World Bank in Washington D.C. in late March 2017.
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 a number of 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.
Digital copies of these two publications are available on the World Bank Group’s web site and will soon be uploaded on the CET’s and MEfDA’s sites.
 IM4DC was a joint venture between the University of Western Australia and Queensland University, currently represented by the Minerals and Energy for Development Alliance (MEfDA).
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