Revenue from minerals is one way in which a developing country can finance its national development and pursue social goals. Currently however not enough tax and other revenue is being obtained by developing countries from mineral exploration and extraction activities taking place on their territory. One reason for this is that the companies involved in mineral exploration are multinationals who can afford to obtain specialist advice on taxation and related issues, minimizing their tax bill. The developing country tax administration on the other hand may lack the necessary skills and resources to challenge the arguments put forward by multinational tax advisers. Another reason is that developing countries must provide sufficient incentives in the form of tax relief or other advantages to attract multinational companies to operate on their territory and they therefore have to achieve the right balance between granting incentives and obtaining tax or mineral royalty revenue.

The Finance for Development Office of the UN Department of Economic and Social Affairs (UN-DESA) is therefore holding an expert group meeting on Extractive Industries Taxation, scheduled to take place on 28 May. This will provide input for the meeting of the UN Committee of Experts on 29 May. The group meeting will focus on the issues arising when a developing country is drawing up a regime for the taxation of mineral royalties.  Representatives of tax authorities, international organizations and the private sector will consider international cooperation in the sector and the structures required to facilitate this cooperation.