In the 2000s, copper exports expanded in quantity and value, but income tax collected by Zambia’s revenue authority remained low. The revenue authority identified the discounted sale of minerals to affiliated companies abroad as a key factor behind this revenue loss. In 2008, the Ministry of Finance introduced a rule requiring mining companies to use publicly quoted benchmark prices as the basis for determining the transfer price of related party mineral sales. This case study analyzes how this rule was implemented in Zambia.
Four years after the Extractive Industries Transparency Initiative (EITI) began encouraging contract disclosure through its standard, this report assesses the extent to which governments of resource-rich countries have taken up the recommendation.
The transfer price is the price of a transaction between two entities that are part of the same group of companies. For example, a South Africa-based company might sell mining equipment and machinery to its Ghana-based subsidiary.
The commodity downturn represents an opportunity to invest in good practices that will help countries break from a legacy of inadequate governance and legal structures, weak enforcement of tax legislation and imprudent revenue management.
Le présent rapport évalue le développement et la mise en œuvre des règles de contrôle des prix de transfert dans le secteur minier dans différents pays et contextes. Comme l’illustrent les études de cas complétant ce volume, le Ghana, la Guinée, la Sierra Leone, la Tanzanie et la Zambie font face à plusieurs difficultés majeures dans l’application des règles sur les prix de transfert.
The commodity downturn represents an opportunity to invest in good practices that will help countries break from a legacy of inadequate governance and legal structures, weak enforcement of tax legislation and imprudent revenue management. Making improvements in establishing and enforcing strong governance and fiscal frameworks now to capture resource rents will also pay off when mineral prices rise again.
Which types of information—and in which format—will be of use to communities closest to extractive sites? This paper is written for national and subnational policy makers and civil society organizations trying to improve transparency and governance of the extractive sector at the local level.
Throughout much of the world, governments have entrusted state-owned enterprises with major responsibilities for developing and managing natural resource extraction projects. In some cases these companies have been effective vehicles for the development and execution of state policy.