Mining Taxation in Colombia

Duanjie Chen () and Guillermo Perry ()

No 12562, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: This paper assesses the current Colombian mining tax and royalty regime in terms of efficiency, competitiveness and revenue performance vis-a-vis other relevant mining countries. It then discusses the convenience of introducing a Resource Rent Tax (RRT) to new mining projects (together with a reduced common royalty rate for all minerals) and simulates its potential effects on efficiency and revenue performance. In particular, the paper examines the interactions between a RRT, royalties and the Corporate Income Tax under different RRT designs, tax rates and capital return allowances. It also discusses the convenience of project by project against sectorial ring-fencing. It concludes with a blueprint for reform as well as political economy and administrative considerations for the specific case of Colombia.

Keywords: Natural resources; Resource rent tax; marginal effective tax rate (search for similar items in EconPapers)
JEL-codes: H21 O13 Q38 (search for similar items in EconPapers)
Pages: 64
Date: 2010-12-13
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:012562

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