Countries in West Africa are extremely rich in resources but tend to lose out on substantive amounts of government revenue from the extractive sector. Inadequate legal and regulatory frameworks and ineffective administrative systems are often cited as the main culprits for the low tax take.
However, lack of access to information required to impose the right amount of taxes, monitor compliance and audit mining companies often prevents revenue administrations from employing even their basic frameworks and systems.
Countries across West Africa struggle with similar issues and challenges, and often with the same multinational mining companies. Through sharing different experiences, approaches and practices, revenue and mining administrations in the region can therefore strengthen their position against these companies, who otherwise often benefit from the lack of effective tax enforcement.
The case for regional collaboration
ODI and GIZ have been supporting this exchange of experiences in West Africa. Our recent joint paper showcases useful practices and lessons learnt to strengthen taxation of the mining sector in four countries.
This month our co-organised regional exchange event on “Identifying and Mitigating Tax Risks in the Mining Sector” in Abidjan, Côte d’Ivoire, provided a timely opportunity to share such experiences and discuss ways to consolidate good practices in mining taxation across the region.
The event brought together West African government officials from revenue and mining administrations in Côte d’Ivoire, Guinea, Liberia, Sierra Leone, Burkina Faso, Mali, Niger, and Togo, as well as two guests from Tanzania, as representatives from East Africa.
The presentations, discussions and commentary from the plenary all pointed in one clear direction. To effectively tax large multinational mining companies, revenue and mining administrations must find ways to collaborate – both within and between countries.
