Tax Rate

Tax rate is the percentage, fixed amount, or other rate applied to a relevant tax base to determine a tax liability.

For mining activity, the applicable rate depends on the jurisdiction, taxpayer status, business structure, and type of tax. A single universal mining tax rate therefore cannot be applied to all mining operations.

Nominal and effective tax burden

The nominal tax rate does not necessarily equal the effective tax burden. Deductions, exemptions, tax credits, expenses, and rules for determining the tax base can change the final amount payable.

When modeling mining economics, the tax rate should be applied only to the tax base defined by the relevant legislation.

Taxes can affect net profit, cash flow, and the calculated payback period of a mining project.