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Fiscal Systems for Hydrocarbons: Design Issues
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The authors examines the key elements of the legal and fiscal frameworks utilized in the petroleum sector and aims to outline desirable features that should be considered in the design of fiscal policy with the objective of optimizing the host government's benefits, taking into account the effect that this would have on the private sector's investment.Abstract:
Although host governments and the investors may share one common objective-the desire for the project to generate high levels of revenue-their other goals are not entirely aligned. Host governments aim to maximize the rent for their country over time, while achieving other development and socioeconomic objectives. Investors' aim is to ensure that the return on investment is consistent with the risk associated with the project, and with their corporations' strategic objectives. To reconcile these often conflicting objectives, more and more countries rely on transparent institutional arrangements and flexible, neutral fiscal regimes. This paper examines the key elements of the legal and fiscal frameworks utilized in the petroleum sector and aims to outline desirable features that should be considered in the design of fiscal policy with the objective of optimizing the host government's benefits, taking into account the effect that this would have on the private sector's investment. Chapters 2 and 3 provide background material on, respectively, the stages of an oil and gas project and the type of legal arrangements normally used in the petroleum sector. The relative advantages and disadvantages of the tax and non-tax instruments used in petroleum fiscal regimes are discussed in Chapter 4. Chapter 5 outlines the features of successful fiscal regimes, while system measures and economic indicators are described in Chapter 6. Finally, in Chapter 7, a sensitivity analysis is used to illustrate some typical fiscal systems' design issues.read more
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References
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Resource Impact: Curse or Blessing? A Literature Survey
TL;DR: A survey of the academic literature on the impact of natural resources on an economy can be found in this article, where the authors assess how the literature explains the transmission mechanisms between resource revenues and economic damage, and what political reforms might be needed to carry out the necessary policies to avoid negative impacts.
BookDOI
Fiscal policy formulation and implementation in oil-producing countries
TL;DR: The authors brings together studies that provide analysis and findings on fiscal policy issues in oil-producing countries from a diverse international perspective, focusing on how to manage oil resources in a way that contributes to a stable macroeconomic environment, sustainable growth, and poverty reduction.
Journal ArticleDOI
Uncertainty, Risk Aversion and the Taxing of Natural Resource Projects
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The Taxing Task of Taxing Transnationals
TL;DR: In this paper, the integration of investment flexibility, tax competition, and agency issues is crucial to our understanding of corporate tax policies, and the authors show how these institutional features have been integrated into tax competition and agency models.
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A Primer on Mineral Taxation
TL;DR: In this article, the authors discuss options available to tax mineral extraction projects particularly in developing countries, and propose tax and non-tax mechanisms to achieve a desirable government share of the economic rent generated from mineral extraction.