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See detailTaxes and declared profits: evidence from gold mines in Africa
Zanaj, Skerdilajda UL; Bourgain, Arnaud UL; Zanaj, Skerdilajda UL

in Resources Policy (2022), 78

In this paper, we analyze the effects of tax changes on the declared profits of extractive firms. We consider a country that levies a profit tax and a royalty on the profits of extractive firms to ... [more ▼]

In this paper, we analyze the effects of tax changes on the declared profits of extractive firms. We consider a country that levies a profit tax and a royalty on the profits of extractive firms to maximize its tax revenues. Mining companies located in the country engage in overstating extractive costs to reduce their taxable income. We show that the higher taxes, the lower the declared profit. Then, we estimate the effect of the change of profit taxes and royalties on the extracting firms’ profit in African countries during the period spanning from 2007 to <br />2018. We employ the Mining Intelligence database to constitute an individual data panel of gold mines located in Sub-Saharan countries. Our empirical findings also suggest an inverse relationship between the tax rate change of the tax instruments and the declared profit of the firms. This link indicates that firms decide on how much profit to declare depending on the tax levels. [less ▲]

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See detailA tax competition approach to resource taxation in developing countries
Bourgain, Arnaud UL; Zanaj, Skerdilajda UL

in Resources Policy (2019), 65

In this paper, we investigate the effect of cost misreporting of extractive firms on the optimal design of tax policies. We build a two-period, two-country model where governments aim to attract a foreign ... [more ▼]

In this paper, we investigate the effect of cost misreporting of extractive firms on the optimal design of tax policies. We build a two-period, two-country model where governments aim to attract a foreign-owned multinational firm to raise tax revenues by levying a profit tax and a royalty. The firm overstates its production costs to reduce declared profits and it decides in which country to locate. We find that cost overstatement pushes royalties upward but remains detrimental for tax revenues as well as the capital invested by the firm. The mining country that attracts the extractive firm is often the country with the highest coefficient of overstatement. However, the firm may locate in the country with the lowest overstatement and lowest royalty if both countries have the same profit tax. Reinforcing expertise in mining sectors to reduce asymmetries of information between firms and tax authorities appears to be a priority in developing resource countries. [less ▲]

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See detailThe By-Product Effect on Metal Markets : New Insights to the Price Behavior of Minor Metals
Afflerbach, Patrick; Fridgen, Gilbert UL; Keller, Robert et al

in Resources Policy (2014), 42(1), 35--44

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