References to Tables and Figures in the Analysis Supplement are preceded with “A”. This main report is self-contained but these references will assist readers who wish to consult the supplement.
Marius van Blerck, 1992, Mining Tax in South Africa; DMR, 2014, The South African Mining Industry (SAMI)
A licensing map is available from the regulatory agency at http://www.petroleumagencysa.com/index.php/maps.
pwc 2014, SA Mine, sixth edition, http://www.pwc.co.za/en/publications/sa-mine.jhtml.
As reported by companies in discussions with the mission, the availability of data on such an effect is not clear.
In the sense described by Albert O. Hirschman (1958), The Strategy of Economic Development. New Haven, Conn.: Yale University Press
Chapter IV analyzes these proposals in detail as part of the petroleum fiscal regime.
See IMF Article IV Consultation Staff Report, December 2014.
In particular, two policy papers: Fiscal Regimes for Extractive Industries, Design and Implementation (IMF 2012); Spillovers from International Taxation (IMF 2014); and a handbook by Jack Calder, Administering Fiscal Regimes for Extractive Industries, IMF 2014; and chapters in P. Daniel, M. Keen and C. McPherson (editors), The Taxation of Petroleum and Minerals: Principles, Problems and Practice, Routledge, London, 2010.
The South African Constitution provides in s.73 (2) that only the Cabinet member responsible for financial matters may introduce a money bill (defined in s.77) or a s. 214 bill (equitable shares and allocations of revenue). A South African money bill is defined as a bill that—(1) appropriates money; (2) imposes national taxes, levies, duties or surcharges; (3) abolishes or reduces, or grants exemptions from, any national taxes, levies, duties or surcharges; or (4) authorizes direct charges against the central treasury account. A money bill should not deal with any other matter except—(1) a subordinate matter incidental to the appropriation of money; (2) the imposition, abolition or reduction of national taxes, levies, duties or surcharges; (3) the granting of exemption from national taxes, levies, duties or surcharges; or (4) the authorization of direct charges against the central treasury account.
pwc, 2007-2008, Income Tax Guide, Lexis Nexis: 263-5.
For simplicity, the mission modeled a straight line depreciation alternative over five years: the four year scheme, or declining balance depreciation, would produce roughly similar results.
Where, Y is the percentage tax payable (tax rate) and X is the profit ratio of the mine. The profit ratio (X) is equal to taxable income from gold mining/gross mining income.
IMF, 2012, Fiscal Regimes for Extractive Industries—Design and Implementation (Washington: International Monetary Fund); available at http://www.imf.org/external/np/pp/eng/2012/081512.pdf
The full project examples, simulations and results are presented in the separate Analysis Supplement, Chapter II. The platinum project together with iron ore and coal projects in the Supplement represent the most active precious metals and bulk mineral segments of the current SA mining sector.
Total benefits mean revenue minus operating costs and replacement capital investment (the “cake” from which taxes are paid, debt is serviced, and equity providers are rewarded).
Including gold, PGMs, coal, iron, steel, ferroalloys and aluminum smelting.
Emissions directly incurred by the industry (scope 1) account for 3.6 percent of the national total, with the remaining 9.9 percent consisting of scope 2 emissions, mainly embedded in the purchase of electricity. The NDP further explains that the scope for increasing energy efficiency in the mining sector, while not insignificant, is limited, subject to developments in the electricity sector.
CDP South Africa 100 Climate Change Report 2013, http://www.nbi.org.za/Lists/Publications/Attachments/360/CDP_Report_2013.pdf.
SIMS report: p. 37, (http://anc.org.za/docs/discus/2012/sims.pdf) and The National Development Plan stating: “A conditional carbon tax exemption could be applied to the electricity sector, provided it progressively moves to a lower carbon generation mix, as mandated in the Integrated Resource Plan,” p 171. (http://www.gov.za/issues/national-development-plan/).
Devarajan, S., D. Go, M. Schiff and S. Suthiwart-Narueput, 1996, “The Whys and Why Nots of Export Taxation,” Policy Research Working Paper 1684 (Washington: The World Bank).
PASA would be replaced by DMR if the proposed MPRDA amendment bill is enacted.
By contrast, for example, with Australia where group taxation is permitted and thus the ring-fencing rules assume greater importance.
The full project examples, simulations and results are presented in the separate Analysis Supplement, Chapter III. The Supplement also includes an analysis of shale gas economics.
This analysis focuses on the design of the fiscal regime, comparing the South African regime with that of other petroleum-rich countries, using the 500MMBbl project example. Other factors which are equally relevant for the investment decision and outcome, such as geological prospectivity, proximity to markets, quality of infrastructure, business climate, property rights, and political stability, are assumed constant.
Details of the estimation of the parameters of this process are described in the Analysis Supplement.