'Taxation Trends in Mining' by Warwick Grigor, Canaccord Genuity at Mines and Money Hong Kong 2013
 

'Taxation Trends in Mining' by Warwick Grigor, Canaccord Genuity at Mines and Money Hong Kong 2013

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    'Taxation Trends in Mining' by Warwick Grigor, Canaccord Genuity at Mines and Money Hong Kong 2013 'Taxation Trends in Mining' by Warwick Grigor, Canaccord Genuity at Mines and Money Hong Kong 2013 Presentation Transcript

    • Presented at:www.minesandmoney.com/hongkong
    • Canaccord GenuityMines and Money – Hong Kong, March 2013Taxation and the Mining Industr y, The AfricanContext Warwick Grigor – Executive ChairmanPRIVATE & CONFIDENTIAL
    • Taxation of The MiningSector
    • Taxation of The Mining SectorThe Mechanics of Taxation 4
    • Taxation of The Mining SectorThe Mechanics of TaxationWhy Pick on Mining Companies? 5
    • Taxation of The Mining SectorThe Mechanics of TaxationWhy Pick on Mining Companies?The Competing Interests 6
    • Taxation of The Mining SectorThe Mechanics of TaxationWhy Pick on Mining Companies?The Competing Interests – The Need for a BalanceResource Nationalism 7
    • Taxation of The Mining SectorThe Mechanics of TaxationWhy Pick on Mining Companies?The Competing Interests – The Need for a BalanceResource NationalismComplications Caused by Green Groups 8
    • Taxation of The Mining SectorThe Mechanics of TaxationWhy Pick on Mining Companies?The Competing Interests – The Need for a BalanceResource NationalismComplications Caused by Green Groups and NGOsThe Concept of Resources Rent 9
    • Mining Taxation in theAfrican Context
    • Mining Taxation in the African Context   Corporate Tax Royalty Gov’t Carried Gov’t Buy-in Tax Break Interest Burkina Faso 20% 5% 10   Accel. Dep’n DRC 36% 2.5% 5     Egypt 40%         Ghana 35% 5% 10   Accel. Dep’n Guinea 35% 5% 15 20   Ivory Coast 25% 3% 10   5 Liberia 35% 3%       Mali 35% 6% 10   5 Senegal 25% 3% 10   7 Sierra Leone 30% 5%       Tanzania 35% 4%     Accel. Dep’n 11
    • Mining Taxation in the African ContextTaxation Revenue is Essential 12
    • Mining Taxation in the African ContextTaxation Revenue is EssentialThe Multiplier Ef fect 13
    • Mining Taxation in the African ContextTaxation Revenue is EssentialThe Multiplier Ef fect – Benefits Beyond TaxationResources in the Ground Benefit No-One 14
    • Mining Taxation in the African ContextTaxation Revenue is EssentialThe Multiplier Ef fect – Benefits Beyond TaxationResources in the Ground Benefit No-OneWhat Do Governments Want? 15
    • Mining Taxation in the African ContextTaxation Revenue is EssentialThe Multiplier Ef fect – Benefits Beyond TaxationResources in the Ground Benefit No-OneWhat Do Governments Want?What Do Companies Want? 16
    • Summing Up The mining sector is a tough business in which to operate and in which failure rates are high. Taxation policy needs to reflect this. Profits from commodity price cyclical highs are an essential part of the mining business. They are needed to compensate for cyclical lows. Taxation models from economists fail to consider social benefits and are best left to academics. These social benefits are essential for emerging countries such as those in Africa and they are far more significant than tax recepts alone. African countries that have lifted tax rates to 35%, whilst receiving royalties and requiring government ownership of equity, amongst other imposts, are turning away potential investors and doing the their people a disservice. Recent changes in taxes structures in African countries have been ill advised. 17
    • Canaccord Australia
    • Save the Date for Mines and Money Hong Kong 2014 March 24-28, 2014 - Hong Kong Convention & Exhibition CentreRegister your Interest at:www.minesandmoney.com/hongkong