Diamond Smuggling and Taxation in Sub-Saharan Africa

Matthias Vocke and Nienke Oomes

No 2003/167, IMF Working Papers from International Monetary Fund

Abstract: This paper provides an overview of diamond mining in sub-Saharan African countries, and explores the reasons for substantial differences in their tax rates and fiscal revenues from the sector, which mainly arise from differences in the incentives for smuggling. In a theoretical model, we show that optimal diamond tax rates increase with the degree of competition among diamond buyers, as well as with the corporate share of diamond production, which is confirmed by the data. We then discuss policies to increase revenue, including by enhancing mining productivity, stimulating the exploration of new areas, reducing barriers to entry, and attracting investment into value-adding downstream operations.

Keywords: WP; number of sellers; market price; diamond; mining; nonrenewable resource; optimal taxation; tax evasion; export company; diamond production; export levy; export value; Mining sector; Anti-smuggling; Exports; Corporate taxes; Sub-Saharan Africa; Africa; mining productivity; diamond tax regime; diamond sector taxation; diamond mining (search for similar items in EconPapers)
Pages: 25
Date: 2003-08-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=16812 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2003/167

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().