An Evaluation of the Relative Performance of Alternatively Structured Resource Rent Taxes.

Fraser, R. (2002) An Evaluation of the Relative Performance of Alternatively Structured Resource Rent Taxes. Resources Policy, 28 (1-2). 1 - 6. ISSN 0301-4207 . (The full text of this publication is not available from this repository)

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Official URL
http://dx.doi.org/10.1016/S0301-4207(02)00012-0

Abstract

This paper is motivated by the observation that although both the Australian and British governments have imposed resource rent taxes (RRTs) on their petroleum industries, these taxes have different structures, with the British form featuring both a higher threshold rate-of-return on capital above which tax is payable (r), and a higher rate of tax for these excess profits (t), than the Australian form. The analysis in the paper finds that the revenue-generating performance of alternatively structured RRTs depends both on the profit margin on extracted resource and on the riskiness of the resource deposit. Hence no single structure is superior in all situations, although a low r, t pair is better if profit margins and riskiness are low, while a high r, t pair is better if these factors are high. It is suggested that the choice of RRT structure should be conditional on an ex ante evaluation of these factors. (C) 2003 Elsevier Science Ltd. All rights reserved.

Item Type: Article
Uncontrolled keywords: resource rent tax; petroleum industry; alternative tax structures; revenue-generating performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
Divisions: Faculties > Social Sciences > Kent Business School
Depositing User: Robert Fraser
Date Deposited: 05 Sep 2008 11:29
Last Modified: 14 Jan 2010 14:19
Resource URI: http://kar.kent.ac.uk/id/eprint/5185 (The current URI for this page, for reference purposes)
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