Some of the most substantial proposed amendments relate to tax and customs provisions, with Guinea having notably led a complete overhaul of its tax regime. Guinea’s new regime applies uniformly to all new titles, and specifically excludes the possibility of negotiating a contractual tax and customs framework. Some of the other noteworthy features of Guinea’s new tax provisions include the non-exhaustive character of the tax and customs regimes provided in the mining code, the introduction of export taxes, as well as royalties on gold being payable upon weighing at the Central Bank, irrespective of sales. Moreover, it provides for a capital gain tax imposed on all transfers of titles and shares in mining companies and even indirect change of control, which is also applicable to holders of signed mining conventions.
DRC’s proposed amendments to the code provide for substantial increases in the rate of mining royalties applicable to strategic and precious metals (6% as opposed to 2.5%), non-ferrous metals (6% as opposed to 2%) and precious stones (6% as opposed to 4%). The corporate tax rate would also be raised from 30% to 35%.
This is supplemented by the codification of two new principles, namely (a) the pas de porte (initial payment) representing 1% of the value of a deposit, payable on the acquisition of “worked and documented” assets, and (b) the signing bonus, presumably payable when mining assets are acquired as part of a tender process.
In addition, a super profits tax at the rate of 50% is introduced, applicable when the price of the relevant commodity exceeds by 25% that anticipated in the feasibility study.
Like Guinea, Ivory Coast’s proposed new mining code provides for the non-exhaustive character of its tax regime. A previous version of the draft amendments to the 1995 code provided for a variable mining royalty set at 3% for gold (to be increased if the price of gold exceeds $US1,000), 3% for diamonds, and 2.5% for base metals, subject to increase in the event of a surge in prices. This has been removed in the latest available draft amendments, which provide that the rate of the mining royalty is to be set under the Law on Finance.
In Burkina Faso’s case, the draft amendments adopted by the Council of Ministers provide for the removal of certain tax benefits during the exploitation phase, such as the seven-year exemption on the lump sum minimum tax on industrial professions, the licence tax and the employer and apprenticeship tax (taxe patronale et d’apprentissage). In addition, the draft introduces a new capital gain tax at the rate of 20% on the assignment of mining rights.
The reduction of tax stabilisation appears as a recurring feature of recent mining reforms. Indeed, Guinea’s new mining code offers a stabilisation regime limited to a maximum of 15 years and which, except for production and export taxes, only covers the stabilisation of the tax rates – specifically excluding the tax bases.
duced through the removal of the 10-year legal stability guarantee, proposed to be replaced by an undertaking not to amend the mining code for three years. As for companies already holding mining titles issued under the current code, not only are acquired rights proposed to be reduced from a 10-year stability guarantee to five, but such five-year protection would only apply if the title holder has secured minimum investments of $US500 million dependent on this investment producing high value-added mining products in-country.
Burkina Faso is considering limiting the tax stability to a maximum period of 20 years, as opposed to the entire duration of the exploitation permit.