New Research Report: Tax Compliance in Extractive Industries

The Budget Advocacy Network (BAN) has released a comprehensive research report examining tax compliance practices in Sierra Leone's extractive industries. The report, titled "Mining Tax Justice: Strengthening Compliance and Revenue Generation in Sierra Leone's Extractive Sector," provides an in-depth analysis of current tax policies, compliance challenges, and potential reforms.

Key Findings

The research, conducted over a six-month period, reveals significant gaps in tax compliance within the extractive sector, resulting in considerable revenue loss for the government. Key findings include:

• Inconsistent application of tax rules across different mining companies and subsectors
• Limited capacity of revenue authorities to effectively monitor production and exports
• Challenges in valuation of minerals for tax assessment purposes
• Concerns about transfer pricing practices that reduce taxable income
• Lack of transparency in tax incentives granted to mining companies

According to the report, improving tax compliance in the extractive sector could potentially increase government revenue by 15-20%, which could significantly enhance public service delivery and development investments.

Stakeholder Perspectives

The research incorporated perspectives from a wide range of stakeholders, including government officials, mining companies, local communities, and civil society organizations. Industry representatives highlighted challenges in complying with complex and sometimes contradictory regulations, while community stakeholders emphasized the need for mining revenue to benefit local development.

Recommendations

Based on the findings, BAN has proposed several policy recommendations:

1. Streamlining tax administration processes for the extractive sector
2. Strengthening the capacity of the National Revenue Authority and National Minerals Agency
3. Enhancing transparency in mining contracts and tax incentives
4. Implementing more robust production monitoring systems
5. Establishing clear guidelines for mineral valuation
6. Reviewing existing tax incentives to ensure they serve the public interest

Launch Event and Dissemination

The report was officially launched at a multi-stakeholder forum attended by representatives from government, industry, civil society, and development partners. BAN will conduct regional dissemination workshops in key mining areas to ensure that the findings reach affected communities and local authorities.

"This research is not just about identifying problems, but about finding practical solutions that can benefit both the government and the extractive companies," said Ibrahim Kamara, BAN's Research Lead for Tax Justice. "We believe that fair and efficient taxation of natural resources is essential for sustainable development in Sierra Leone."

The full report is available for download on the BAN website, and summary briefs will be distributed to policymakers and other stakeholders.