Key Issues identified from presentation on ‘Tax regimes in mining sector and illicit flows’

  • His presentation noted that the major problem in the Sub-Saharan Africa is how to mobilise domestic revenue and overdependence on donors.
  • He added that the tax base tends to get eroded due to lack of effective ring fencing, linear capital depreciation and control of production, exports and by products.
  • He also noted that the poor Sub Saharan region needs transparency and accountability at all levels if the region is to meaningfully benefit from mining activities.
  • He also highlighted urgent renegotiation of mining contracts when they are unfavourable.

Session Two: “Mining Tax Regimes in Africa and Illicit Financial Flows (IFF)”

The first presentation in this session was by Saviour Mwambwa of Tax Justice Network Africa. After an initial overview of mineral taxation in sub-Saharan Africa (SSA) the presenter proceeded to discuss some of the factors behind poor mining tax revenue mobilisation in SSA. These include: the erosion of tax base due to factors (such as lack of effective ring fencing, treatment of hedging, reference prices and control of production, export and by products); and the ineffectiveness of corporate profit based tax standard instruments in the mining sector.


Discussions of First Session presentations

  • There was a concern that the African Mining Vision is gender blind and also silent on climate change. Therefore a question was posed about whether the African Mining Vision could be revised to include these considerations? Furthermore, the participants recognized and appreciated the changing attitudes towards women in the mining sector, as reflected by WOMIN’s gender and extractive activities.

Session One: Africa Mining Vision: Context and Key Features

The first speaker in this session was Yao Graham of TWN-Africa. His presentation was on the “Context of the AMV” (Powerpoint attached). It analysed the political economy of mining in Africa as a dimension of the continent’s raw material commodity export dependence and what this has meant for the structure of Africa’s economies, nature of integration into the world economy and the effects of the dependence. This was offered as the fundamental reality that the AMV seeks to address.


Conclusion: Reconciling Restraints with Responsibilities

Regimes around natural resource governance are of recent vintage, germinating in the inhospitable environments of civil wars, war-lordism, and state collapse.  The targets of these regimes have overwhelmingly been African states, as well-intentioned international actors have tried to restrain the behaviors of both governments and international actors in extractive industries. 


African Regional Mechanisms

The plethora of global resource sector governance initiatives and institutions are complemented by mechanisms that are gradually evolving in Africa. As targets and recipients of global regimes of restraint, African mechanisms have attempted to borrow and incorporate global norms, standards, and strictures within the overarching framework of African responsibility captured in the New Partnership for Africa’s Development (NEPAD) and the African Peer Review Mechanism (APRM).


The Dodd-Frank Legislation

Since 2008, the U.S. Congress has considered a number of measures to undercut rebel movements and other negative forces in the Eastern DRC from using the sale of tin, tantalum, and tungsten to fuel conflict in the region. Like the KP, these measures were driven by broad mobilization of civil society actors seeking a regime that would restrain rebels implicated in fuelling violent conflict and widespread human rights abuses in the Great Lakes region. The U.S.


The Extractive Industries Transparency Initiative (EITI)

The Extractive Industries Transparency Initiative (EITI) is the most prominent norm of extractive industries transparency.  Established at the World Summit for Sustainable Development in Johannesburg in 2002 at the behest of British Prime Minister, Tony Blair, EITI seeks to assist resource rich countries transform their wealth into tangible development outcomes, through improved transparency.  Officially launched in 2003, the EITI is a coalition of governments, companies, civil society groups and international organizations.



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