INCENTIVOS FISCALES EN LA MINERÍA: CÓMO MINIMIZAR LOS RIESGOS PARA LA RECAUDACIÓN

This guide, published by the International Institute for Sustainable Development (IISD) in 2018, provides a framework and a financial model developed by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) to estimate the costs of tax incentives in the mining sector. It specifically focuses on calculating both the direct revenue losses and the indirect costs resulting from 'behavioral responses'—actions taken by investors to maximize financial benefits from incentives, which often lead to unforeseen revenue losses for governments.

• The guide introduces a four-step framework to calculate the total revenue loss from tax incentives: first, estimating public revenue under a reference fiscal regime; second, calculating the direct cost of incentives; third, calculating the cost of behavioral responses; and fourth, summing these to find the total revenue loss.
• The IGF financial model is pre-configured for a medium-sized open-pit gold mine representative of Sub-Saharan Africa, using a typical tax and royalty regime. It is published under a Creative Commons Attribution-ShareAlike 4.0 International License and follows the FAST standard for financial modeling to allow users to adapt it to local conditions, different commodities, or different mine types.
• Behavioral responses can significantly increase the cost of tax incentives. For example, in a modeled scenario for a gold mine, a corporate income tax exemption had a direct cost of $23.4 million in real terms, but the associated behavioral response of 'high-grading' (accelerating production of higher-grade ore) added another $23.5 million in losses, nearly doubling the total cost to $46.9 million.
• Exemptions on withholding taxes on interest can lead to 'excessive interest deductions,' where investors increase debt levels and interest rates to shift profits to low-tax jurisdictions. In the guide's example, a withholding tax exemption had a direct cost of $6.4 million, but the behavioral response increased the total revenue loss to $49.0 million in real terms.
• Progressive royalties using a 'cumulative structure' can create 'dead zones' where buyers and sellers are incentivized to under-invoice mineral sales to keep prices just below a higher royalty threshold. Monte Carlo simulations in the guide showed that while the average behavioral cost of price manipulation was $4.7 million (1.1% of reference revenue), the highest observed cost reached $115.8 million (26.4% of reference revenue).
• Tax incentives should be modeled simultaneously rather than individually because they interact. For instance, combining import duty exemptions, a 10-year income tax holiday, and dividend withholding tax exemptions resulted in a combined loss of $106.6 million, which was higher than the sum of the individual costs ($87.9 million).
• The guide distinguishes between 'well-oriented' and 'poorly-oriented' incentives based on sensitivity analysis. Well-oriented incentives (typically cost-based) increase in value to the investor when mine performance is poor (e.g., low commodity prices). Poorly-oriented incentives (typically profit or revenue-based) increase in cost to the government when performance is high, meaning they provide the most value when they are least needed for viability.
• To manage uncertainty from commodity price volatility and geological data, the guide recommends two testing methods: scenario modeling (defining base, best, and worst cases) and sensitivity analysis (changing one parameter, such as price, across a wide range of values to identify extreme risks).

APA

Steel, I. (2018). INCENTIVOS FISCALES EN LA MINERÍA: CÓMO MINIMIZAR LOS RIESGOS PARA LA RECAUDACIÓN. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-05/tax-incentives-in-mining-minimising-risks-to-revenue-guidance-es.pdf

Chicago

Steel, Iain. INCENTIVOS FISCALES EN LA MINERÍA: CÓMO MINIMIZAR LOS RIESGOS PARA LA RECAUDACIÓN. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/2025-05/tax-incentives-in-mining-minimising-risks-to-revenue-guidance-es.pdf.

Wikipedia

{{cite report |last1=Steel |first1=Iain |title=INCENTIVOS FISCALES EN LA MINERÍA: CÓMO MINIMIZAR LOS RIESGOS PARA LA RECAUDACIÓN |publisher=International Institute for Sustainable Development |date=2018 |url=https://www.iisd.org/system/files/2025-05/tax-incentives-in-mining-minimising-risks-to-revenue-guidance-es.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{steel2018incentivos, author = {Steel, Iain}, title = {{INCENTIVOS FISCALES EN LA MINERÍA: CÓMO MINIMIZAR LOS RIESGOS PARA LA RECAUDACIÓN}}, institution = {International Institute for Sustainable Development}, year = {2018}, url = {https://www.iisd.org/system/files/2025-05/tax-incentives-in-mining-minimising-risks-to-revenue-guidance-es.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }