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Workshop proposes knowledge product to improve mining tax administration in West Africa

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The extractive industry is a major economic activity in West Africa.

The mining of precious minerals like gold, diamond, bauxite, manganese and more recently oil and gas and the economic benefits that come with the industry is expected to rub off the sub-region, reduce poverty and improve the quality of lives of citizens.

Taxes from the industry is one of the sources of income for most countries, but inefficiency in mining tax administration is denying most countries sufficient benefits from the largely capital intensive industry which also makes impacts in so many ways on the environment and socioeconomic lives of citizens.

Seeking to improve the mining tax administration systems in West African countries, the World Bank organised a two-day workshop under the theme; ‘Improving Mining Tax Administration Frameworks in West Africa’ in Accra September 13 to 14, 2012.

The objective of the workshop was to propose a knowledge product intended to address the constraints and challenges in effective mining tax administration in West Africa.

A mining tax administration expert Mr. Murray Meaton from the Centre for Exploration Targeting (CET), Western Australia made presentations on the various models of mining taxation, showing their merits and demerits.

Mr. Chris du Plessis of the South African Revenue Service, and Mr. Venance Bahati of the Tanzania Mineral Audit Agency among others shared best practices in their countries.

At the end of the workshop, participants agreed on the following factors as key for efficient mineral tax administration in West Africa:

– forward looking fiscal and stability policies with appropriate flexibility and triggers to equitably manage the sector during low and high commodity cycles;

– Systems and processes in place to effectively address oil, gas and mining tax payments administration.  The general tax system may not be sufficient for the extractives sector.

– Institutional cooperation, coordination and information sharing between the ministries of finance and mining.  Options for such coordination may include: a culture of cross fertilisation and sharing between existing departments in charge of finance and minerals, the potential setting up of committees, task forces, units, or agencies as appropriate, given the conditions and realities of countries.

– technical capacity in extractive industries financing and accounting so that people working in these areas can better understand the information,  manage risks,  forecast budgets contributions from the sector adequately, and foster compliance with established mineral policies.

The workshop was attended by representatives from governments – Burkina Faso, Cote d’Ivoire, Ghana,  Guinea, Liberia, Mali, Niger, Nigeria, Sierra Leone and Togo. Civil society organisations and mining industry players were also present.

Some journalists also participated in the workshop to gain insight into mining tax administration.

By Emmanuel K. Dogbevi

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