Ouagadougou - Burkina Faso's transitional parliament passed a new mining code on Friday that abolishes a previous 10 percent tax break on mining company profits and obliges firms to pay into a local development fund.
The adoption of the new code, which replaces 12-year-old mining regulations, was among requirements set by the World Bank for the release $100 million (R1.22 billion) in budget support.
The funds were frozen in February pending passage of the new code and an anti-corruption law, which was adopted in March.
“We think that in the context in which we are living today it's time to move from an attractive code (for miners) to a code for community development,” said Boubacar Ba, the West African nation's energy and mines minister.
Under the new regulations, companies with exploitation permits will pay the normal tax rate on profits of 27.5 percent.
Firms with industrial mining licences will pay 1 percent of monthly turnover excluding taxes or 1 percent of the value of extracted minerals into a local development fund.
It was not clear how it would be decided which of the two payment measures would be used.
The state will also pay 20 percent of its mining revenues into the fund.
Reuters