Understanding and modeling the sharing of mining and petroleum rent in Africa

MODULE No. 1. What are the challenges facing the extractive sector in Africa? (1h) Understand the importance and challenges of the extractive sector in Africa, including the issues of fiscal dependency and the fight against climate change.

MODULE No. 2. Why sector-specific taxation? (45 min) Understand the need to adopt a specific tax system for the extractive sector and discover the three main models of contracts: concession, production sharing and service.

MODULE No. 3. Economic Rent (45 min) Understanding the notion of rent in economics, for Ricardo and Hotelling.

MODULE No. 4. From Concept to Rent Calculation (1h) Learn how to calculate economic rent, as the discounted sum of the net pre-tax cash flows of the extractive investment project.

MODULE No. 4 bis. Calculation of the mining rent (45 min) Perform the calculation in Excel of the mining rent based on the economic data of a fictitious mining project.

MODULE No. 4 ter. Calculation of the petroleum rent (45 min) Perform the calculation in Excel of the petroleum rent based on the economic data of a fictitious petroleum project.

MODULE No. 5. Taxes on Production (1h) Understand taxes on production: fixed duties, bonuses, surface royalty and ad valorem royalty.

MODULE No. 5 bis. Calculation of taxes on production in the mining sector (30 min) Perform the calculation in Excel of fixed fees, surface royalty and mining royalty based on the tax data of a fictitious mining project.

MODULE No. 5 ter. Calculation of taxes on production in the petroleum sector (30 min) Perform the calculation in Excel of a signing bonus, the surface royalty and the oil royalty from the tax data of a fictitious oil project.

MODULE No. 6. Depreciation expense (1h30) Understand that capital expenditures are subject to depreciation expense over several years using three main possible methods: straight-linear, declining, and pooling.

MODULE No. 6 bis. Calculation of depreciation in the mining sector (45 min) Calculate depreciation expenses in Excel based on the economic and tax data of a fictitious mining project: straight-line depreciation of buildings and declining-balance depreciation of capital goods.

MODULE No. 6 ter. Calculation of depreciation in the petroleum sector (45 min) Calculate depreciation expenses in Excel based on the economic and tax data of a fictitious oil project: straight-line depreciation of drilling and declining-balance depreciation of capital goods.

MODULE No. 7. Financial expenses (1h30) Understand the calculation of financial charges according to the method of repayment of the loan: loan with constant amortization or loan with constant annuities. Discuss the risk of undercapitalization and the rules that can be put in place to limit it.

MODULE No. 7 bis. Calculation of financial expenses in the mining sector (45 min) Calculate financial expenses in Excel based on the economic and tax data of a fictitious mining project: debt financing at constant amortization of the initial investment of the project.

MODULE No. 7 ter. Calculation of financial expenses in the petroleum sector (45 min) Calculate financial expenses in Excel based on the economic and tax data of a fictitious oil project: debt financing at constant amortization of the initial investment of the project.

MODULE No. 8. Production Sharing (1h) Understand the production sharing that is common in the oil sector: the company is first allowed to recover its cost, before operating the oil profit sharing.

MODULE No. 8 bis. Calculation of the production sharing in the petroleum sector (30 min) Perform the calculation in Excel of a production sharing based on the tax data of a fictitious oil project: cost oil, cost stop, profit oil sharing between the company and the State.

MODULE No. 9. Corporate income tax (CIT) and minimum tax (1h30) Understand the calculation of loss carry-forwards, corporate income tax (CIT) which taxes profit and the minimum tax which taxes turnover.

MODULE No. 9 bis. Calculation of corporate income tax and minimum tax in the mining sector (45 min) Perform the calculation in Excel of the carry-forwards, corporate income tax and minimum tax based on the tax data of a fictitious mining project.

MODULE No. 9 ter. Calculation of corporate income tax and in the petroleum sector (30 min) Perform the calculation in Excel of the loss carry-forwards and corporate income tax from the tax data of a fictitious oil project

MODULE No. 10. Average Effective Tax Rate (METR) (1h) Understand that the estimated rent-sharing of an extractive project is measured by the average effective tax rate (METR), which corresponds to the government’s share of the rent.

MODULE No. 10 bis. Calculating the Average Effective Tax Rate in the mining sector (30 min) Perform the calculation in Excel of the average effective tax rate (METR) based on the economic and tax data of a fictitious mining project.

MODULE N° No. 10 ter. Calculating the Average Effective Tax Rate in the petroleum sector (30 min) Calculate the average effective tax rate (METR) in Excel using economic and tax data from a fictitious oil project.

MODULE No. 11. Resource rent tax (1h) Understand the resource rent tax, which is intended to directly tax net cash flows or other tax on additional profits.

MODULE No. 11 bis. Calculating a Resource Rent Tax in the mining sector (45 min) Perform the calculation in Excel of a resource rent tax based on the tax data of a fictitious mining project.

MODULE No. 12. State participation and withholding tax on dividends (1h) Understand the interest of state equity in the capital of the extractive company and the withholding tax on dividends.

MODULE No. 12 bis. Calculation of state participation and withholding tax on dividends in the mining sector (30 min) Calculate dividend levies in Excel using the tax data of a fictitious mining project: state equity and a withholding tax on dividends.

MODULE No. 12 ter. Calculation of state participation and withholding tax on dividends in the petroleum sector (30 min) Calculate dividend levies in Excel using the tax data of a fictitious oil project: state equity and a withholding tax on dividends.

MODULE No. 13. Simulations in the mining sector (45 min) Understand that once the mining rent sharing model is completed, it makes it possible to carry out economic and fiscal simulations by varying the parameters.

MODULE No. 13 bis. Simulations in the petroleum sector (45 min) Understand that once the oil rent sharing model is complete, it makes it possible to carry out economic and fiscal simulations by varying the parameters.