How does mining impact the government revenue of countries where gold is mined?
Governments in developing countries tend to have narrow tax bases. Reducing budget deficits – often mandated under IMF (International Monetary Fund) sponsored relief programmes – while at the same time maintaining or increasing spending on health, education, infrastructure and poverty-reducing measures is often a key priority. Broadening the domestic tax base by bringing other activities within the scope of taxation, while desirable, is often administratively impracticable. Additional revenue from mining royalties and taxes can therefore be particularly beneficial. Occasionally governments take a direct stake in mining developments. This is the case for Mali, for example, where the government has 20% ownership of gold mines.
