The impact of tax concessions on extraction of non-renewable resources

an application to gold mining in Tanzania

Amos James Ibrahim Shwilima, Hideki Konishi

    Research output: Contribution to journalArticle

    1 Citation (Scopus)

    Abstract

    Gold mining firms in Tanzania pay royalty and corporate taxes, but also receive many tax concessions. Such tax incentives may cause to reschedule their extraction plans and thereby change the expected life of a gold mine. We model a representative mining firm’s extraction decision using optimal control theory, into which various tax incentives are introduced to determine their theoretical impact. Our results suggest that in the race to take advantage of tax incentives, a firm may end up making excessive investments, which in turn increases extraction rate. Actual extraction patterns of several gold mining companies in Tanzania are also reviewed.

    Original languageEnglish
    Pages (from-to)221-232
    Number of pages12
    JournalJournal of Natural Resources Policy Research
    Volume6
    Issue number4
    DOIs
    Publication statusPublished - 2014 Oct 1

    Fingerprint

    nonrenewable resource
    concession
    tax incentive
    gold
    Tanzania
    taxes
    incentive
    firm
    resources
    corporate tax
    control theory
    gold mine
    cause
    tax

    Keywords

    • corporate tax policy
    • natural resources
    • tax incentives

    ASJC Scopus subject areas

    • Management, Monitoring, Policy and Law
    • Geography, Planning and Development

    Cite this

    The impact of tax concessions on extraction of non-renewable resources : an application to gold mining in Tanzania. / Ibrahim Shwilima, Amos James; Konishi, Hideki.

    In: Journal of Natural Resources Policy Research, Vol. 6, No. 4, 01.10.2014, p. 221-232.

    Research output: Contribution to journalArticle

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