Tax justice in the extractive industry

Canadians for Tax Fairness stands with the Global Alliance for Tax Justice and other civil society organizations on this Global Day of Action for tax justice in the extractive industry.

The extractive industry is one of the highest revenue-earning sectors in the world. The top 40 mining companies raked in USD683 billions of revenues last year from oil, gas, and minerals -- mostly found in resource-rich but developing countries. But host countries  earn little in exchange, losing natural resources on top of billions from abusive tax practices.

Profitable mining corporations can afford the most expensive legal and accounting firms to help avoid paying their fair share through means such as shifting profits in tax havens and financial secrecy jurisdictions. To add insult to injury, governments hoping to attract foreign investment will offer corporations generous tax incentives such as income tax holidays and low corporate income tax rates. 

The result? Billions in revenues are lost from tax incentives and tax avoidance, compounded by irreversible damage to the environment and harmful effects on host regions, especially among women and the poorest in these communities.

On this Day of Action, our united organizations call on governments around the world to:

  • Stop the plunder and exploitation of natural and human resources and move away from reliance on extractivist economies characterized by over-production and over-consumption by the wealthy.
     
  • Ensure a comprehensive and effective tax regime for extractive industries, including through resource or export taxes on the export of raw materials from extractive activities, taxation of services related to extractive industries and progressive environmental taxes. Apply effective anti-abuse measures to prevent corporate tax avoidance and other types of illicit financial flows.
     
  • Levy just, progressive and adequate tax rates on mining and extractive activities and ensure that this revenue contributes to quality public services for all, with special priority to the needs of mining-affected communities and vulnerable groups.
     
  • Scrap wasteful tax incentives granted to extractive industries.
     
  • End the impunity of corporations in mining and other extractives industries in their tax abusive practices, including illicit financial flows, and hold them to account for compliance with environmental standards, human rights and fiscal policies. Ensure the financial transparency of extractive corporations, and publish all contracts and any agreements entered into by governments for the exploitation of natural resources, including Production Sharing Agreements.


     
  • Ensure transparency and accountability at different levels of government and parliamentary policy-making and regulation over the extractives industry. Implement strict anti-corruption policies and punish government officials who are involved in corrupt practices in all phases of mining and extractivist activities, from exploration and licensing to production, use and final point of sale. Hold governments, parliaments, sub-national state bodies and their agencies to account for the tax abuses of mining companies and the complicity of local elites.
     
  • Institute and enforce tighter social, financial and environmental regulations and sanctions over the extractives sector. Close down harmful and abusive mining projects/companies.
     
  • Reject or cancel provisions for fiscal stability, investor state dispute settlement, grandfathering and other lock-in clauses in treaties, agreements and contracts with extractive industries, which constrain the decision-making processes of governments, legislative and parliamentary bodies over fiscal and regulatory concerns.
     
  • Uphold the rights of communities and women affected by mining and other extractivist activities, including their right to protect their communities.
     
  • Protect the rights of the artisanal miners.

Follow and contribute to today's Global Day of Action on social media under the hashtag #taxjustice