It's time to streamline mining sector

Before the dust settles on Kenya’s new mining and oil legislation, the concept of a windfall tax has arisen. It may be new to Kenya, but has existed in various forms around the world for hundreds of years. It obviously fills the industry with dread, as another drain on potential profits. For governments though, it is often seen as the right thing to do, given the finite nature of minerals.

In its most basic form, a windfall tax is levied when economic conditions allow certain industries to experience above-average revenues or profits. It gets complicated when governments and industries battle on the definition of “above average” and the mechanics of calculating the tax.