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Taxing the Rent of Non-Renewable Resource Sectors
A Theoretical Note
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- Julien Daubanes1, Saraly Andrade de Sá1
- Author Affiliations
- 1: ETH Zurich, Switzerland
- 21 July 2014
- Bibliographic information
This study analyses the economic rent generated by the exploitation of a non-renewable resource, and the taxation of this rent. We present a synthetic model of a non-renewable-resource sector where deposits must be costly developed before they are exploited; the analysis emphasizes the effect of resource taxation on the discouragement to the development of new reserves. We discuss the limitations of neutral profit-taxation schemes and examine the distortions caused by various resource-taxation systems on the rent and its allocation: tax evasion, royalty-induced distortions, imperfect tax commitment, agency issues... We also discuss the measurement of resource rents for taxation purposes, and issues with the management of the resource tax income.
- resource rents, tax distortions, non-renewable resources, tax income management
- JEL Classification:
- H20: Public Economics / Taxation, Subsidies, and Revenue / General
- Q30: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Nonrenewable Resources and Conservation / General