IDEAS home Printed from https://ideas.repec.org/a/wly/natres/v4y1980i2p123-145.html
   My bibliography  Save this article

Taxing Natural Resource Projects

Author

Listed:
  • Craig Emerson

Abstract

A wide range of fiscal measures for natural resource based projects are analyzed in this paper. Maximizing government revenue involves taxing heavily any rents generated in the project while retaining the incentive to invest. Recovery efficiency must also be preserved. Based upon the principles of resource economics and project appraisai a series of tests are derived and applied to alternative tax schemes in order to assess their efficiency in maximizing the present value of government revenues. The tests indicate that of the ten schemes examined, the most likely to achieve revenue maximization is a progressive resource rent tax incorporating a safeguard tapering provision and superimposed upon normal corporate income tax. Many commonly applied taxes are demonstrated to have serious distortionary effects on the investment decision and to fail to capture a large proportion of rents generated. Cet article analyse une gamme variée de mesures fiscales applicables aux projets concernant les ressources naturelles. L'optimisation des recettes de l'Etat implique une lourde imposition des revenus provenant du projet tout en continuant à encourager les investissements. L'efficacité de la relance doit aussi être maintenue. Sur la base des principes de l'économie des ressources et de l'évaluation des projets, une série de tests a été conçue et appliquée à des systèmes fiscaux alternatifs afin de permettre l'évaluation de leur efficacité en ce qui concerne l'optimisation de la valeur actuelle des recettes de l'Etat. Les tests indiquent que sur les dix systèmes examinés, le plus susceptible d'optimiser les recettes semble être un impôt progressif sur les revenus provenant des ressources qui incorpore une clause de garantie dégressive et qui vient s'ajouter à l'impôt sur le revenu des sociétés habituel. L'article démontre que de nombreux impôts habituellement appliqués présentent de sérieux effets de distortion ayant un impact sur la décision d'investir et qu'une grande proportion des revenus de ces projets échappe à l'imposition. En este artículo se analiza una gama amplia de medidas fiscales sobre proyectos relacionados con recursos naturales. Maximizar los ingresos fiscales requiere imponer fuertes impuestos sobre las rentas generadas por el proyecto manteniendo al mismo tiempo el incentivo para la inversión. Debe mantenerse también la eficiencia en la recuperación de los recursos en cuestión. Basado en principios de la economía de recursos y de evaluación de proyectos se derivan una serie de pruebas sobre esquemas alternativos de aplicación de impuestos con el objeto de evaluar la eficiencia de dichos esquemas en la maximización del valor presente del ingreso del gobierno por concepto de impuestos. Las pruebas indican que de los diez esquemas examinados, el que con mayor probabilidad va a maximizar el ingreso del gobierno es el impuesto progresivo sobre la renta del recurso con un provisión de salvaguarda la reducción de dicho impuesto, más un impuesto simultáneo sobre el ingreso de la empresa. Muchos de los esquemas de imposición comúnmente aplicados tienen serios efectos distortionadores sobre las decisiones de inversión y consecuentamente impiden la colección de una gran parte de las rentas generadas.

Suggested Citation

  • Craig Emerson, 1980. "Taxing Natural Resource Projects," Natural Resources Forum, Blackwell Publishing, vol. 4(2), pages 123-145, April.
    • Handle: RePEc:wly:natres:v:4:y:1980:i:2:p:123-145
    DOI: 10.1111/j.1477-8947.1980.tb00971.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1477-8947.1980.tb00971.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1477-8947.1980.tb00971.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Peter L. Swan, 1976. "Income Taxes, Profit Taxes and Neutrality of Optimizing Decisions," The Economic Record, The Economic Society of Australia, vol. 52(2), pages 166-181, June.
    2. Cochrane, Stuart & Francis, John, 1977. "Offshore petroleum resources : A review of UK policy," Energy Policy, Elsevier, vol. 5(1), pages 51-62, March.
    3. Hughes, Helen, 1975. "Economic rents, the distribution of gains from mineral exploitation, and mineral development policy," World Development, Elsevier, vol. 3(11-12), pages 811-825.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Craig Emerson & Ross Garnaut, 1984. "Mineral Leasing Policy: Competitive Bidding and the Resource Rent Tax Given Various Responses to Risk," The Economic Record, The Economic Society of Australia, vol. 60(2), pages 133-142, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stijns, Jean-Philippe, 2006. "Natural resource abundance and human capital accumulation," World Development, Elsevier, vol. 34(6), pages 1060-1083, June.
    2. D. M. Kiefer, 1978. "The Equity of Alternative Policies for the Australian Homeowner," The Economic Record, The Economic Society of Australia, vol. 54(1), pages 127-139, April.
    3. Peter L. Swan, 1978. "The Mathews Report on Business Taxation," The Economic Record, The Economic Society of Australia, vol. 54(1), pages 1-16, April.
    4. Craig Emerson & Ross Garnaut, 1984. "Mineral Leasing Policy: Competitive Bidding and the Resource Rent Tax Given Various Responses to Risk," The Economic Record, The Economic Society of Australia, vol. 60(2), pages 133-142, June.
    5. Oyarzo, Mauricio & Paredes, Dusan, 2019. "Revisiting the link between resource windfalls and subnational crowding out for local mining economies in Chile," Resources Policy, Elsevier, vol. 64(C).
    6. Oyarzo, Mauricio & Paredes, Dusan, 2021. "The impact of mining taxes on public education: Evidence for mining municipalities in Chile," Resources Policy, Elsevier, vol. 70(C).
    7. Ross Garnaut & Anthony Clunies Ross, 1979. "The Neutrality of the Resource Rent Tax," The Economic Record, The Economic Society of Australia, vol. 55(3), pages 193-201, September.
    8. Ganhane, José Jeremias & Stage, Jesper, 2024. "Estimating resource rents for Mozambique," Resources Policy, Elsevier, vol. 94(C).
    9. R. R. Officer, 1982. "Company Tax Systems and their Effects on Investors," The Economic Record, The Economic Society of Australia, vol. 58(4), pages 339-351, December.
    10. Wayne Mayo, 1979. "Rent Royalties," The Economic Record, The Economic Society of Australia, vol. 55(3), pages 202-213, September.
    11. Davis, Graham A, 1998. "The minerals sector, sectoral analysis, and economic development," Resources Policy, Elsevier, vol. 24(4), pages 217-228, December.
    12. Abdo, Hafez, 2014. "Investigating the effectiveness of different forms of mineral resources governance in meeting the objectives of the UK petroleum fiscal regime," Energy Policy, Elsevier, vol. 65(C), pages 48-56.
    13. Oyarzo, Mauricio & Paredes, Dusan, 2023. "Shocks derived from mining windfalls and horizontal transfers: Exploring the permanent income hypothesis in Chilean municipalities from a spatial competition approach," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    14. Smith, B., 1999. "The Impossibility of a Neutral Resource Rent Tax," ANU Working Papers in Economics and Econometrics 1999-380, Australian National University, College of Business and Economics, School of Economics.
    15. G. K. Helleiner, 1977. "Canada's Stake in the New International Economic Order: Comment," Canadian Public Policy, University of Toronto Press, vol. 3(3), pages 337-343, Summer.
    16. Paredes, Dusan & Rivera, Nathaly M., 2017. "Mineral taxes and the local public goods provision in mining communities," Resources Policy, Elsevier, vol. 53(C), pages 328-339.
    17. CRAIG EMERSON and P. J. LLOYD, 1983. "Improving Mineral Taxation Policy in Australia," The Economic Record, The Economic Society of Australia, vol. 59(3), pages 232-244, September.
    18. Robert Albon, 1978. "Rent Control, A Costly Redistributive Device? The Case of Canberra," The Economic Record, The Economic Society of Australia, vol. 54(3), pages 303-313, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:natres:v:4:y:1980:i:2:p:123-145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1111/(ISSN)1477-8947 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.