Mining Taxation in Colombia
64 Pages Posted: 22 Feb 2015
There are 2 versions of this paper
Date Written: December 9, 2014
Abstract
This paper assesses the current Colombian mining tax and royalty regime in terms of efficiency, competitiveness and revenue performance vis-a-vis other relevant mining countries. It then discusses the convenience of introducing a Resource Rent Tax (RRT) to new mining projects (together with a reduced common royalty rate for all minerals) and simulates its potential effects on efficiency and revenue performance. In particular, the paper examines the interactions between a RRT, royalties and the Corporate Income Tax under different RRT designs, tax rates and capital return allowances. It also discusses the convenience of project by project against sectorial ring-fencing. It concludes with a blueprint for reform as well as political economy and administrative considerations for the specific case of Colombia.
Keywords: Natural resources, Resource rent tax, marginal effective tax rate.
JEL Classification: H21, O13, Q38
Suggested Citation: Suggested Citation