Mining is a cyclical, long-term business. A mining development project is highly capital-intensive, with many years before returns are generated. Our investment decisions are affected by each host country or region’s competitiveness and suitability as a long-term mining destination, due to the stability of its regulatory and fiscal framework.
Payments to governments
Taxes and royalties are direct annual cash contributions made to our host governments. Tax is paid on the income generated within the country and royalties are paid as a percentage of either the revenue or volume of the natural resource extracted and sold. Payment levels are determined by the national, regional or local government for each operation in accordance with the provisions of local laws and regulations. The payments we make often represent a significant source of income to those countries and regions.
Creating value for society
Glencore’s socio-economic contribution creates the most significant value in the developing world. If we were not present in these countries, there would be fewer sources of employment, far lower payments to local suppliers, and often significantly lower tax revenues. Our reach also extends beyond the contributions of our operations and employees through our support for local procurement and service providers, education and health initiatives and development projects that deliver sustainable benefits to our local communities.
Other taxes and payments
In addition to income-based taxes, we are responsible for other, non-income based taxes, which, amongst others, may include licence fees, property taxes, capital taxes, withholding taxes, export taxes, employer-related payroll taxes and other tax payments, as required by the applicable domestic tax laws.
We engage with a variety of stakeholders on a range of tax-related issues. We build and maintain partnerships with tax authorities and work together to address any disputes.
Supporting transparency and EITI
We support increased transparency as to how payments are redistributed and or reinvested in our host communities. We are active participants in the Extractive Industries Transparency Initiative (EITI), an extractive industry sector initiative promoting good tax governance, accountability, transparency and the prevention of corruption through the verification and full publication of company payments and government revenues.