* Govt wants revenues to fund post-war reconstruction
* Companies say new levy will stifle investment
By Joe Bavier
ABIDJAN, Dec 14 Ivory Coast's parliament has
approved a new tax on gold profits, a parliament official said
on Friday, despite industry objections that the levy could
stifle development of the country's budding mining sector.
The law was passed on Thursday as part of a bill modifying
the 2012 budget.
"The bill modifying the fiscal annex of the 2012 budget was
voted on ... It was approved," Marius Ndri, the director of
legislative services for the National Assembly, said.
The law must now be signed by President Alassane Ouattara
before it takes effect, a senior mines ministry official said.
"We have not yet enacted it," Noel Guetat, Mines Minister
Adama Toungara's chief of staff, told Reuters.
"We cannot say whether that will be done before the end of
the year," he added.
Ivory Coast, the world's top cocoa producer, is a relatively
small but growing gold producer and is pushing to expand its
long-neglected mining sector to help fund post-war
reconstruction after a brief armed conflict last year ended a
decade of political crisis.
The government proposed a new tax in September on what it
termed "super profits", saying it would be applied for 2012 and
yield some 40 billion CFA francs ($79.8 million) in additional
income to the state.
"Most of these mining companies pay almost no tax...Of total
state revenues, the mining companies pay in just 6 billion (CFA
francs). That's the reality," Guetat said.
Miners complained, however, that the government failed to
take into consideration their concerns that the levy would hurt
some companies already operating in the West African nation and
discourage others from investing.
The new tax will be levied on profits above a
government-fixed estimated production cost of $615 per ounce,
with the rate dependent upon the world price of gold, according
to the text of the law seen by Reuters.
Companies will pay from 17 to 20 percent with gold prices
between $1,600 and $1,800 per ounce. Above that range, the rate
rises by 1 percent for each $50 increase in the gold price up to
a maximum rate of 50 percent. Below $1,600, it falls by 1
percent per $50 decrease.
Miners obliged to pay corporate tax in Ivory Coast will pay
a lower rate.
"It's not a windfall tax that's been sent to parliament;
it's a punitive tax," Randgold Resources' CEO Mark
Bristow told Reuters on Thursday before the law was approved.
The Africa-focused miner launched operations at its Tongon
mine in Ivory Coast last October, with annual output of 280,000
to 300,000 ounces expected over the next five years.
Australia's Newcrest Mining and Canada's La Mancha
Resources also operate mines in the country. In August, the
government granted production permits to Canada's Endeavour
Mining Corp and Occidental Gold, a unit of Australia's
Perseus Mining Limited.
In a quarterly statement published in September, Perseus
said a decision on its Sissingue mine was on hold "pending
clarification of the fiscal regime applicable to the project".
The company had planned to invest more than $160 million to
develop the mine, the government said in August.