THE FUTURE OF RESOURCE TAXATION: A ROADMAP

The report argues that traditional mining taxation, heavily reliant on corporate income tax and royalties, is insufficient for developing countries due to profit shifting and outdated paradigms. It highlights new pressures, including the transition to low-carbon minerals, disruptive automation technologies that reduce local employment and payroll taxes, and the financial burdens of climate change. The document proposes a three-step roadmap—understanding current roles, crowdsourcing innovative ideas, and researching these options—to create a handbook of improved mining revenue collection strategies.

• The current 'tax/royalty fiscal regime' relies on corporate income tax (CIT), typically 20% to 40% of net profits, and royalties, usually 2% to 6% of gross sales. While CIT encourages investment by sparing loss-making entities, it is prone to profit shifting and delays in revenue collection due to long construction lead times.
• Developing countries struggle to realize expected mining revenues due to aggressive tax planning by multinationals and internal weaknesses such as overly generous tax incentives and limited capacity to apply complex international tax norms. The IMF estimates that base erosion and profit shifting (BEPS) deprive developing countries of over USD 200 billion in annual revenue across all sectors.
• The demand for low-carbon minerals presents both opportunities for new revenue and risks of instability. While some countries, like Chile, use mineral supply to attract industrial investment, there is uncertainty regarding future demand due to circular economy policies, recycling of metals like copper and aluminum, and the development of mineral substitutes.
• Technological transitions in mining, such as automation and AI, threaten the traditional benefit-sharing model by replacing low- and medium-skilled workers. This reduces payroll taxes and indirect taxes; for instance, payroll taxes accounted for 14.6% of government mining revenues in Zambia in 2017.
• Digitalization increases the value of intangible assets like patents and algorithms, which exacerbates profit-shifting risks as local companies pay licensing fees to entities potentially located in low-tax jurisdictions.
• Climate change forces fossil-fuel-dependent nations, such as Saudi Arabia and Nigeria, to diversify their tax bases toward mining. Simultaneously, developing countries face increased financial needs for climate adaptation infrastructure, which they are entitled to expect from developed economies responsible for most emissions.
• The 'Future of Resource Taxation' project will follow a three-step process: analyzing the current role of fiscal policy, crowdsourcing innovative ideas from stakeholders, and researching these ideas to produce a handbook of options for policy-makers.

APA

Taquiri'], [. A. D. '. L. '. M. '. R. '. (2020). THE FUTURE OF RESOURCE TAXATION: A ROADMAP. International Institute for Sustainable Development. https://www.iisd.org/system/files/2020-10/future-resource-taxation-roadmap.pdf

Chicago

Taquiri'], ['Isaac Agyiri Danso', 'Thomas Lassourd', 'Howard Mann', 'Alexandra Readhead', 'Jaqueline. THE FUTURE OF RESOURCE TAXATION: A ROADMAP. International Institute for Sustainable Development, 2020. https://www.iisd.org/system/files/2020-10/future-resource-taxation-roadmap.pdf.

Wikipedia

{{cite report |last1=Taquiri'] |first1=['Isaac Agyiri Danso', 'Thomas Lassourd', 'Howard Mann', 'Alexandra Readhead', 'Jaqueline |title=THE FUTURE OF RESOURCE TAXATION: A ROADMAP |publisher=International Institute for Sustainable Development |date=October 2020 |url=https://www.iisd.org/system/files/2020-10/future-resource-taxation-roadmap.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{taquiri2020future, author = {Taquiri'], ['Isaac Agyiri Danso', 'Thomas Lassourd', 'Howard Mann', 'Alexandra Readhead', 'Jaqueline}, title = {{THE FUTURE OF RESOURCE TAXATION: A ROADMAP}}, institution = {International Institute for Sustainable Development}, year = {2020}, month = oct, url = {https://www.iisd.org/system/files/2020-10/future-resource-taxation-roadmap.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }