Supporting Governments and Civil Society: Fiscal Frameworks
CCSI advises governments and civil society organizations on various issues relating to fiscal frameworks for the extractive industries sector.
Cameroon: Fiscal analysis of the proposed Sundance iron ore project, and fiscal tool to estimate the government revenues from the proposed Herakles Farms palm oil plantation project
At the request of a coalition of NGOs in Cameroon, CCSI prepared three outputs:
(1) – Review of Cameroon’s legal framework.
(2) – Fiscal assessment of the 2012 Mbalam convention to estimate the company and government revenues resulting from the implementation of the proposed Sundance iron ore project. Apart from comparing the investor profitability and the government take with iron-ore projects in other jurisdictions, the study integrates the findings of a carbon-offset analysis prepared, on a voluntary basis, by an independent forestry expert with long working experience in Cameroon.
(2) – Fiscal tool to estimate the government revenues resulting from the proposed Herakles Farms palm oil plantation project based on the investor’s forecasted cash flows. The lost revenues resulting from the tax holiday and reduced corporate income taxes for the life of the project are also calculated.
Namibia: Review of Namibia’s Transfer Duty Bill and Mozambique’s Fiscal Code Amendment Bill
Against the backdrop of highly profitable deals concluded between companies transferring project shares, CCSI was asked by the Governments of Namibia and Mozambique to review the capital gains tax legislation of each country. This advisory work is based on CCSI’s worldwide survey of the implementation of a tax on capital gains arising from direct and indirect transfer of mineral rights. CCSI has researched the following aspects: which host governments tax capital gains? with which legal and fiscal tools? and what are the challenges or transferable lessons learned so that countries can gain some benefit from these deals whose value derives from the rights to the natural resources?
The attached note outlines some scenarios by which direct and indirect transfers of project shares may take place, as a broad checklist in designing regulations for a capital gains tax to capture these scenarios.