CEMAC training - Taxation of extractive industries

This training on the taxation of extractive industries was given from 17 to 19 December 2019 in Douala, Cameroon by M. Bertrand Laporte, Senior Lecturer at the University of Clermont-Auvergne, CERDI, and expert to international institutions. The training is also available in E-learning from December 13, 2019 to January 31, 2020.

FERDI and IHEDD are thus offering an innovative teaching method that can be adapted to the availability of participants and Increases the effectiveness of face-to-face training. Auditors can access the distance learning a few days before the training in Douala and for more than a month afterwards. 

The public discussion on the sharing of mining rents between States and investors is recurrent and reappears with each reversal in world prices. Understanding the stakes of the sector and mastering the tools for balanced negotiation between government and companies is essential. 

The objective of this training is to provide participants with the capacity to master the stakes of the sector, to have knowledge of the fiscal instruments used in resource-rich countries to tax industrial mining companies, and to build a quantitative analysis model adapted to the understanding of the sharing of mining rent between States and investors.

The training is intended for CEMAC Commission’s officials and Member State administrations dealing with taxation of extractive industries. 14 auditors participated in the training.

• Mining industry in developing countries: Specificity of the mining sector (high potential rent, uncertainty, heavy sunk investments, asymmetry of information, market power, etc.).
• Mining taxation for a "fair" rent sharing: Theoretical approach to mining rent versus practical approach, principles sought by taxation (economic neutrality, transparency, simplicity, effectiveness of the regime and progressiveness...), taxonomy of the various tax instruments (mining royalties, corporate taxes, government equity participation, rent tax), indicators for evaluating the tax regime (average effective tax rate, marginal effective tax rate), existing sources of information and publicly available economic models.
• Building a mining rent-sharing model: Calculate the economic rent of a mining project, build a cash flow model step by step, read a feasibility study of a mining project, apply tax legislation (mining code, general tax code and specific conventions), simulate tax reforms, practical cases, limitations of the model and the importance of the parameters.
• Using the rent-sharing model to assess the impact of a tax reform.

Auditors who have completed and validated the training will be awarded the "Hautes Etudes en Développement Durable" certificate, with a special mention for "Taxation des industries extractives" at the end of the course.