ICMM Members' Tax Contribution Report: 2019 Update
2 December 2020
In December 2018, ICMM published the first member tax survey results which disclosed the taxes and royalties paid by ICMM company members between 2013 and 2017. This 2nd edition, prepared by PwC, extends the period to include 2018 and 2019 and therefore examines trends from 2013 – 2019.
- Tax is increasingly seen as a sustainability issue. ICMM recognises that efficient, effective, transparent, and stable resource governance is central to enhancing social and economic opportunities. Through the disclosure of tax and royalties, ICMM company members demonstrate their commitment to applying ethical business practices and robust systems of corporate governance and transparency to support sustainable development; an integral aspect of ICMM’s Mining Principles.
- 15 ICMM member survey participants reported that over $150bn has been paid to tax authorities around the world from 2013 to 2019. These payments are made up of corporate income tax of $96.6bn and royalties of $56.7bn, a total of $153.3bn. Over the same period, the CIT and royalty charge as a percentage of PBTIR (profit before tax, impairments, non-tax deductible exceptional items and royalties which are charged within administrative expenses) was 39.4% - for every $100 of profit before impairments, $39.40 was charged in corporate income tax and royalties.
- The report illustrates the need to consider carefully the role of royalties in tax regimes, and the risk that they make some mines unviable when commodity prices fall. It does this through tracking overall corporate income tax and royalty charges as a percentage of profit across the last commodity cycle, where the overall corporate income tax and royalty charge reaching 64% of profits in 2016 . Since 2017, mining sector profits began to increase. This report shows that the recovery in profitability continued through to 2018 and 2019 following the partial recovery in commodity prices.
- The availability of robust tax data is essential for informing the national and global debates on the reasonable and fair taxation of the mining sector. Those debates inform future policy decisions critical to ensure community focussed socioeconomic benefits.