Summary
The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) Secretariat and the Organisation for Economic Co-operation and Development (OECD) organized a technical workshop on Tax Base Erosion and Profit Shifting (BEPS), on the final day of a five-day series of meetings at UN Headquarters in Geneva, Switzerland.
Howard Mann, IGF Secretariat, introduced the topic, noting that IGF members have identified this issue as one of their main concerns. With Dan Devlin, OECD, he outlined a joint IGF-OECD programme that aims to assist governments and build country capacity on the issue.
Elfrieda Tamba, Commissioner General, Liberia Revenue Authority, gave the keynote address, recounting her country’s experience of increasing tax revenue by 500% through addressing revenue losses in the mining sector. She highlighted measures that have improved tax compliance in Liberia, including education and stakeholder engagement, and the training of government officials, which, she said, has improved inspection capacity.
The workshop addressed a range of issues related to BEPS, including: how to detect instances of transfer mispricing; combating mispricing by strengthening mineral testing facilities in countries; and tax incentives that can help minimize profit shifting. Participants learned about the practice of debt financing that results in tax base erosion via interest deductions, and also discussed investment treaties and stabilization clauses.
Participants raised questions about conceptual and practical difficulties related to addressing BEPS, considering the differences between illegal tax evasion practices and tax avoidance practices that remain within the bounds of legality. They discussed ways to address various technical and capacity challenges for governments, including through sharing of information to promote market and price transparency, and joint regional laboratory facilities for minerals testing.
At the close of the workshop, Alexandra Readhead, BEPS Project Technical Advisor, IGF, encouraged countries to continue sharing their expertise and concerns, and Devlin highlighted the importance of conveying these messages to ministers and policy makers in order to bring about good financial governance in the mining sector.
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Opening Session
(L-R) Howard Mann, IGF Secretariat; Dan Devlin, OECD; Alexandra Readhead, IGF; and Elfrieda Tamba, Liberia Revenue Authority
Elfrieda Tamba, Liberia Revenue Authority
Janvier Nkurunziza, UNCTAD
Transfer Mispricing in Mining
Alexandra Readhead, IGF
Thulani Shongwe, African Tax Administration Forum
Debt Financing in Mining – Protecting the Mining Tax Base
Against Excessive Interest Deductions
Dan Devlin, OECD
Mineral Valuation – Combating Mispricing by Strengthening
Mineral Testing Facilities
(L-R) Alexandra Readhead, IGF; Sahr Wonday, Director General, National Minerals Agency, Sierra Leone; Matthieu Delorme, Executive Vice President - Commodities, Cotecna Inspection SA; Alhousseine Kaba, General Inspector, Guinea; Mohamed Lamine Nabe, Guinea
Matthieu Delorme, Executive Vice President - Commodities, Cotecna Inspection SA
Alhousseine Kaba, General Inspector, Guinea
Tax Incentives for Mining Investment – Minimizing Profit
Shifting as a Result of Incentives
(L-R) Howard Mann, IGF Secretariat; Iain Steel, Budget Strengthening
Initiative, Liberia; Dan Devlin, OECD; Alexandra Readhead, IGF
Iain Steel, Budget Strengthening Initiative, Liberia
Investment Treaties and Stabilization Clauses
Howard Mann, IGF Secretariat
Around the Venue
IISD RS team (L-R): Nancy Williams, Logistic Coordinator; Jessica Wang, Writer; Sean Wu, Digital Editor; Kelly Sharp, Writer;
Suzi Malan, Writer; and Delia Paul, Team Leader