Stakeholder Dialogue Addressing Economic Development Through Legal and FISCAL Gap Analyses of Mining Tax Laws

Enhancing Mining Tax Law for Revenue Transparency and Accountability in Africa’s Critical Minerals Sector

🗓️ 26–27 June 2025 | 📍 Johannesburg, South Africa
Organised by Southern Africa Resource Watch (SARW), International Senior Lawyers Project (ISLP), and Open Society Foundations (OSF)

Introduction

Africa’s critical minerals, including copper, lithium, and cobalt, are central to the global energy transition. Yet, current mining tax laws and fiscal frameworks often fail to deliver just, equitable, and development-focused outcomes for citizens. To address this, SARW, ISLP, and OSF convened a two-day stakeholder dialogue in Johannesburg, bringing together over 40 participants, including fiscal lawyers, tax justice advocates, legal researchers, CSOs, regional bodies, and academia.

Day 1 Highlights

Opening Session

The dialogue opened with strong framing messages emphasising that Africa’s debt crisis and the rush for its critical minerals are inseparable issues. Without aligning tax regimes with debt sustainability and development goals, mineral wealth risks deepening economic dependency. Weak fiscal systems were highlighted as creating opportunities for tax evasion and avoidance, underscoring the need for proactive reforms to close loopholes before they are exploited.

Presentation of ISLP Legal Memorandums

Legal memorandums analysing mining tax laws and fiscal gaps in the DRC, Zambia, and Madagascar were presented. Key findings included:

• DRC: Outdated mining codes, limited judicial enforcement capacity, lack of specialised financial crime courts, and poor inter-ministerial coordination. Recommendations included legal reforms to enhance transparency, empower courts to prosecute economic crimes, and integrate mining revenues with national development plans.

• Zambia: While anti-avoidance provisions are strong, implementation is undermined by limited institutional capacity, with only a few officers in the transfer pricing unit. Excessive tax incentives, weaknesses in double taxation treaties, and the absence of a harmonised mining and fiscal policy were highlighted. Recommendations focused on building capacity for transfer pricing enforcement, revising DTAs, and operationalising a comprehensive critical minerals strategy.

• Madagascar: Lacks a comprehensive mining policy, has limited community participation in fiscal governance, and ineffective revenue sharing mechanisms. Recommendations included establishing legal obligations for revenue transparency, participatory budgeting frameworks, public access to environmental impact assessments, and integrating mining governance into national development objectives.

Country Reflections

Country groups reflected on the legal memorandums and identified:

1. 2–3 major legal or fiscal gaps

2. 1 key reform barrier

3. 3 national priorities for change by 2027

Key reflections included:

• Zambia emphasised institutional capacity constraints, especially in transfer pricing enforcement, and highlighted the value of regional and international partnerships, peer learning, and civil society and media engagement to sustain pressure for transparency.

• Madagascar called for governance reforms to ensure mining revenues benefit communities directly, prioritising revenue transparency obligations, participatory budgeting, and the development of a comprehensive mining policy.

• DRC highlighted the need to harmonise mining tax frameworks, close regulatory loopholes, and strengthen coordination between national and provincial authorities to reduce revenue leakages and support local development.

Cross-Cutting Themes from Day 1

A consistent pattern emerged across all countries:

• Laws exist, but enforcement remains weak

• Fiscal incentives often carry high political costs

• CSR is used as a detour around rights-based redistribution

• Community voices remain marginalised in decision-making processes

“Before we even talk about evasion, we must fix the inefficiencies that allow it.”

Day 2 Highlights

Reform Pathways and Roadmaps

Day 2 focused on developing practical reform roadmaps. Key proposals included:

• Strengthening revenue authorities and mining ministries to ensure coordinated enforcement of tax laws and regulations

• Establishing geological survey frameworks to enable fair and informed contract negotiations

• Operationalising revenue sharing frameworks to ensure communities benefit directly from extraction

• Regional integration to harmonise mining tax regimes, prevent a race to the bottom, and strengthen Africa’s bargaining power in global markets

Participant Reflections

Participants emphasised that progressive tax laws alone are insufficient without investment in institutional capacity, digital systems for tax administration, and mining cadastres to improve transparency and enforcement. Discussions underscored the need to align mining governance with national development plans and environmental and social safeguards, and to harmonise national and provincial tax frameworks to reduce leakages.

Closing Reflections

The dialogue closed with a shared understanding that mining tax justice requires more than legal reforms – it demands enforcement capacity, political will, regional collaboration, and community-rooted accountability.

“Revenue transparency is not a favour – it is a right.”

Key Takeaways

• Laws exist, but enforcement remains the gap
• Fiscal incentives often benefit investors at public cost
• CSR remains voluntary and unlinked to rights-based redistribution
• Regional collaboration is essential for bargaining power
• Communities must see and feel mineral revenues to trust governance

Recommendations & Next Steps

1. Build institutional capacity for transfer pricing, tax auditing, and enforcement

2. Develop digital systems for tax collection, monitoring, and reporting

3. Harmonise mining tax frameworks regionally, including through platforms like Pamoja

4. Integrate mining governance with national development plans

5. Ensure legal reforms are enforceable, with embedded community participation mechanisms

Acknowledgements

SARW, ISLP, and OSF extend their gratitude to all speakers, facilitators, partners, and participants for their expertise, critical reflections, and commitment to advancing mining tax justice and fiscal transparency in Africa’s critical minerals sector.