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From your brief explanation it is now understood to me that the definition I picked from the article should also carried ‘minus any investment that added to the purchase cost’. Now would appreciate if any other Goxian could provide an answer to my fourth question ‘If CAPITAL GAIN TAXES are revenues which would be recovered back by companies through production, does it mean profits sellers realize from sales of mineral rights are not taxed/deleted from the costs incurred by companies through production’

Hi Dr, I'm not the author of the report. My (slightly educated) assumption is that capital gains formulas would include normally any investment that improved the value of a given asset. 

Alan, thanks for your voice of care for justice to the poor citizens of Mozambique. Thought the Mozambican Government understands that capital gain taxes which would be recovered back by companies through production are only important just like interest free loans are to her. Would appreciate some advice on my other questions you left behind.

Yes Dr, I think the future power station vs. immediate taxation is a perplexing one for outsiders, especially those concerned about Mozambicans getting a good deal. It would be interesting to hear about the outcome of the deal. 

The definition <CAPITAL GAIN = SELL PRICE – PURCHACE PRICE – OTHER ADJUSTMENTS LIKE DEPRECCIATION) still confuses non-tax experts like this one.

How CAPITAL GAIN is calculated in the following cases?

  1. PURCHASE PRICE IS GREATER THAN SELL PRICE (seller didn’t invest in anything other than the PURCHASE PRICE)
  2. PURCHASE PRICE IS GREATER THAN SELL PRICE (on top of purchase price, seller invested in exploration) 
  3. PURCHASE PRICE IS LESS THAN SELL PRICE (on top of purchase price, seller invested in exploration)

If CAPITAL GAIN TAXES are revenues which would be recovered back by companies through production, does it mean profits sellers realize from sales of mineral rights are not taxed/deleted from the costs incurred by companies through production.

I’m also confused with the following statement:

‘’What is unusual about the ENI tax assessment is the government’s acceptance of a promise to build a 75 mega-watt power station many years in the future in lieu of $130 million in taxes that would have been paid in 2013”

It is a statement which should concern the citizens of Mozambique more because the many years of waiting would enabled them to reproduce their share of $ 130 capital gain tax many times through cautious investing and profit to the tune of several 75 mega-watt power stations at the  end of the many years of waiting to receive a single 75 mega-watt one. I suspect the Companies have capitalized on the irresponsibility of officials in the Mozambican Government to benefit at the expense of Mozambican citizens.