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Prepared by Mehdy Ben Brahim, Mario Mansour, and Irena Jankulov Suljagic
Unless otherwise specified, all tax-related indicators in this paper are based on data provided by the Malian Ministry of Finance and its agencies (primarily the tax and customs administrations).
The Malian authorities are currently working on a revision of the mining code. Seven out of a total of ten mines currently operate under the 1991 MC, due to lengthy stability clauses, and three operate under the 1999 code.
The estimates used in this paper were provided by the Malian tax and customs administrations. Mali does not publish the methodology, data sources, and the benchmark tax system for its tax expenditures estimates, which makes it difficult to assess their quality.
Two mines in activity among the largest and most profitable have benefited in the past few years from CIT exemptions under the 1991 MC.
Although royalties are seen as a tax on rent, they are economically less efficient than other forms of rent taxes (See Boadway and Keen (2010).
Finance laws for 2016 and 2017.
Safe harbors are statutory provisions that relieve taxpayers from general transfer pricing regulations; their purpose is to provide certainty of tax outcomes, when taxpayers follow certain rules.
Under the 1991 MC, the base rate applicable to mining companies was Libor instead of the BCEAO’s rate.
Double tax treaties allocate the respective rights to tax between two contracting states.
The CDIS data allows for reporting of investment flows from the British Overseas Territories and Crown Dependencies. Mali could align its reporting to this structure to better assess FDI flows from low-tax jurisdictions.
Extractive Industries Transparency Initiative, Mali Report 2014, December 2016.
See Box 2 for a description and illustration of the effect of thin capitalization on tax revenue. The “Third Parties” example is based on cases encountered in tax returns of mining MNEs resident in Mali.
The analysis in this section is based on firm-level data provided by the Direction Générale des Impôts for the most-recent available years (2014 to 2016).
This ratio can be thought of as a “tax return on turnover ratio”—i.e. how much the government shares in each Euro of sales from the mining rent.
Through the life of a mine, accumulated earnings are likely to increase equity and therefore reduce the debt to equity ratio to a more acceptable level.
The Malian State generally owns 20% of the mines, of which half are entitled to priority dividends.
Finance law for 2016.