The true cost of gold - Lyla Latif
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In 2020, Mali produced over 71 tons of gold— an amount worth billions of dollars. But Mali saw only $850 million dollars from that gold. And this situation isn’t unique: a number of other gold-rich countries in Africa aren’t seeing the income they should given the price of gold. So, what’s going on? Lyla Latif digs into how foreign corporations exploit African nations for their resources.
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Mali has historically been a gold rich country. Here you can find more information about the ancient Mali Empire and its king Mansa Musa. Today, Mali is a low-income country with a weak economy marred by internal conflict. Its gold reserves are licensed to foreign corporations under a tax regime that is vulnerable to tax avoidance.
The inability of gold rich countries, such as Mali, to earn sufficient sources of revenue is attributed to the resource curse. Mining companies have been accused by civil society and governments of shifting untaxed profits to offshore jurisdictions. This has come to be known as the problem of illicit financial flows.
In the context of gold, Dubai has been pointed out as the transit point for smuggled gold out of Mali and other African countries. The Tax Justice Network has published an interesting blog questioning why mining companies evade and avoid tax using tax havens.
In the video, there was a mention of how mining companies use foreign subsidiaries in Ireland and the Netherlands to reduce their tax liability. This is usually referred to as the double Irish - Dutch sandwich. You can read about it here.
The inability of gold rich countries, such as Mali, to earn sufficient sources of revenue is attributed to the resource curse. Mining companies have been accused by civil society and governments of shifting untaxed profits to offshore jurisdictions. This has come to be known as the problem of illicit financial flows.
In the context of gold, Dubai has been pointed out as the transit point for smuggled gold out of Mali and other African countries. The Tax Justice Network has published an interesting blog questioning why mining companies evade and avoid tax using tax havens.
In the video, there was a mention of how mining companies use foreign subsidiaries in Ireland and the Netherlands to reduce their tax liability. This is usually referred to as the double Irish - Dutch sandwich. You can read about it here.
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