An analysis of potential benefits to the State of realistic adjustments to the mining tax structure

By use of models based on the South African gold-mining industry, analyses are made of the effects of changes in the mining tax structure on the .State's tax income from potential new mines; also on the percentage of such mines likely. to be proceeded with. The percentage is affected by the correlation between changes in taxation and in the flotation pay limits !or new mines. It is shown that the State stands to gain both directly and indirectly from raising the level of the capital allowance and from its extension to all mines; and that the reduced taxation resulting from a lowering of the discriminatory high tax formula for the gold mines, would, in respect of potential new mines, be compensated for by a significant increase in the percentage of such mines that would be proceeded with.