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

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Keywords

  • corporate tax policy
  • natural resources
  • tax incentives

ASJC Scopus subject areas

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

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