Abstract
A comparison of the mining codes adopted in Burkina Faso and Tanzania shows, for example, that the rules on the holding of exploration permits are more advantageous in Burkina Faso, but the combination of taxes then applied to exploration companies puts the country at a disadvantage. The key areas of taxation that affect mining projects are the customs regime, value-added tax, corporation tax, payroll and other taxes, withholding tax and royalty. Calculations for a model gold-mine project indicate that when the tax liability is assessed in conjunction with the effect of mandatory state participation in the exploitation company (10% in Burkina Faso, zero in Tanzania) the same project would produce a 27% higher return to the shareholders if conducted in Tanzania than if undertaken in Burkina Faso under the current legislation.
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