Financial regulation and tax system management in extractive industries, particularly the mining sector, have consistently encountered significant challenges due to the unique characteristics of this industry. Aiming to elucidate the role of economic tools and governance principles in the balanced reform of the mining taxation regime, this article analyzes the transition from a traditional, revenue-centric approach toward an effective governance model, alongside enhancing the accountability of the legal framework. Therefore, the role of influential economic instruments and models must first be examined, as efficient economic structures serve as the foundation for implementing good governance in this sector.
Reform and innovation in financial tools, including the substitution of traditional tax exemptions with modern accounting mechanisms, represent a fundamental step in cultivating taxpayer trust and mitigating tax evasion. In this regard, transitioning to participatory taxation models can increase the voluntary compliance of operators by fostering informational transparency. At the governance level, realizing effective governance necessitates the integration of databases to improve accountability, prevent rent-seeking behavior, and control the prevalent under-reporting within this domain.
Furthermore, an optimal governance system must guarantee environmental sustainability. This framework must also manage mining revenues through the implementation of prudent fiscal policies to avert phenomena such as the Dutch disease and the resource curse. Ultimately, this research seeks to demonstrate how tax system reform can drive a structural transformation in the mining sector—shifting it from a purely revenue-driven resource into a sustainable mechanism for both the government and investors, while concurrently safeguarding the public interest.