Payments to Governments

In support of financial transparency and accountability, Nevsun has voluntarily committed to disclosing payments made to governments. This disclosure is aligned with “Publish What You Pay” initiatives that call on companies to disclose their payments to governments, such as the Extractive Industry Transparency Index (EITI) and proposed legislation in the U.S. and Canada.

Since the Bisha Mine began commercial operations, our economic contributions have been considerable. Of approximately $2.4 billion in economic value generated, over $1.2 billion* represents direct payments into the Eritrean economy. These economic benefits continue to generate many spin-off effects.

Note that some of the goods and services purchased from local suppliers are ultimately sourced from outside the country—which reduces the value of the spin-off effects to far less than the gross values in the table. The largest example would be the approximately $24 million in fuel purchase deposits made during the year (2014 – $42 million).

Payments to governments and government-owned entities from 2011 to 2015 are shown included in the chart below:

PAYMENTS TO GOVERNMENTS FROM BISHA OPERATIONS

Total 2016 2015  2014  2013 2012 2011
Forms of taxation
Income taxes $443,469 $26,626 $21,790 $88,983  $60,484  $209,586  $36,000
Royalties $130,310 $14,931 $17,620 $30,331  $14,774  $31,462  $21,192
Payroll taxes $36,318 $7,218 $8,199  $6,631  $6,370  $5,159  $2,741
Withholding taxes, customs and duties [1] $26,014 $4,461 $6,347 $4,260  $5,007  $3,236  $2,703
$636,111 $53,236 $53,956 $130,205  $86,635  $249,443  $62,636
PAYMENTS TO ENAMCO [2]
Dividends $179,750 $16,000 $19,000   $76,750  $68,000 
Total Payments to Government $815,861 $69,236 $72,956 $206,955 $86,635 $317,443 $62,636

[1] Withholding taxes were merged with customs and duties in the 2014 reporting year

[2] During 2011, ENAMCO received $81,409 as a return of capital. ENAMCO has repaid to Nevsun $161.5 million in connection with its acquisition of a 30% interest in BMSC.

Payments to the Canadian Government

Remittances made by the Company to the Canadian government consist of statutory taxes withheld on employee earnings. A summary of these remittances is as follows. Payroll taxes are remitted in Canadian dollars, and were translated at the average USD / CAD FX rate in effect for each respective year.

Forms of taxation Total 2016 2015  2014  2013 2012 2011
Payroll taxes $16,705 $4,428  $2,700  $1,838   $2,251   $1,373   $4,115