Corporate income tax provisions and fiscal incentives specific to mining

Abstract

Unlike royalties that, in the majority of cases, may be imposed irrespective of profitability, corporate income tax (CIT) is only charged when an operation generates taxable income, in other words if it is profitable. Most fiscal regimes recognise the unique characteristics and risks of the mining industry and provide a variety of fiscal incentives primarily designed to alleviate them and attract investment to the industry. While some of these incentives are economically efficient, others are hard to justify from the government’s point of view on a cost-benefit basis, particularly in cases where they may also elicit undesirable industry behavioural responses.