On 13 September 2023, the government adopted a draft decree amending decree no. 2017-0023/PRES/PM/MEMC/MINEFID of 23 January 2017 setting mining taxes and royalties. The government justified this amendment by correcting shortcomings in the decree of 23 January 2017 and introducing major innovations in the setting of mining royalties that will make it possible to lift the cap on the level of proportional royalties at 5%. The adoption of this decree will enable Burkina Faso to significantly improve state revenue linked to the collection of proportional royalties. The decree was signed on 27 October 2023, as explained by the government.
What are the major innovations?
The previous decree, issued in 2017, capped the rate at which royalties could be collected. Royalties were charged at a rate of 3% if the price of gold was less than 1,000 dollars per ounce, 4% if the price was between 1,000 and 1,300 dollars per ounce and 5% if the price exceeded 1,300 dollars per ounce, as if the price would never exceed this level. But since 2019, the price of gold has risen steadily and has even reached 2,000 dollars an ounce. But because of the cap, Burkina Faso has not been able to take advantage of this financial windfall. The Ministry of Mines therefore undertook a review of the decree to revise the collection rates upwards.
According to the new decree, which www.minesactu.info has been able to consult, the royalty collection rates are now as follows:
- 3% if the price of gold is less than 1,000 dollars per ounce;
- 4% if the price is between 1,000 and 1,300 dollars per ounce
- 5% when it is between 1,300 and 1,500 dollars per ounce
- 6% if the price of an ounce of gold is between 1,500 and 1,700 dollars per ounce,
- 6.5% if the price is between 1,700 and 2,000 dollars per ounce
- 7% if the price is above 2,000 dollars per ounce.
Royalties or proportional fees are a tax levied in Burkina Faso on the sale of gold. The rate is calculated on the day the gold is weighed, based on the previous day’s gold price.
In 2021, royalties amounted to 113.203 billion FCFA. They made the largest contribution to mining revenues (36%).
Elie KABORE
#Mines_Actu_Burkina
