Abstract

This paper examines the impact of natural resources on non-resource tax revenue mobilization, investigating the effect of gold rent sharing on non-resource tax revenues in 19 African gold-producing countries over the period 2009-2020. The study uses the Average Effective Tax Rate (AETR) as a de jure measure of the government’s share of gold rents. Recognizing that the relationship between AETR and non-resource tax revenue may be non-linear, the paper identifies the threshold above which AETR begins to negatively affect these revenues. Literature suggests that mining windfalls can reduce tax pressure on other sectors due to relaxed collection efforts or lower tax rates. The results show a non-linear effect with a single transition threshold, defining two regimes: in the first, AETR positively and significantly impacts non-resource tax revenues, while in the second, the effect is negative and significant. Thresholds differ by mine grade: 53.24% for low-grade, 49.31% for medium-grade, and 33.36% for high-grade mines.