Dynamic Taxation of Non-Renewable Natural Resources under Asymmetric Information about Reserves

Osmundsen, Petter

doi:10.2307/136501

Cited by 39 publications

(38 citation statements)

References 6 publications

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“…When the government receives the equity without charge, its revenues include part of the investor's return to capital and the tax on the resource rent (Brosio 2006). However, state participation can reduce the risks of expropriation and improve the government's access to information and control over extraction operations (Osmundsen 1998). The disadvantages of this alternative are not only that the government bears greater economic risks, but also that it faces a confl ict of interest, because it is a shareholder and the regulator at the same time.…”

Section: Fiscal Instruments For Extractive Industriesmentioning

confidence: 99%

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Rents to riches?: the political economy of natural resource-led development

2012

Choice Reviews Online

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Section: Fiscal Instruments For Extractive Industriesmentioning

confidence: 99%

“…7. See, for example, Bird (2008); Das-Gupta and Mookherjee (1998); Kidd and Crandall (2006); Lledo, Schneider, and Moore (2004); Osmundsen (1998);Thirsk (1997).…”

Section: Notesmentioning

confidence: 99%

Rents to riches?: the political economy of natural resource-led development

2012

Choice Reviews Online

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“…Using the notation from the beginning of section 3, one should distinguish between t c > t y (overinvestment incentives), t c > 1 (gold plating incentives), and t c exceeding the t c of another sector or jurisdiction (transfer incentives). Osmundsen (1995Osmundsen ( , 1998 has principal-agent models, in which authorities impose tax schedules which do not rely on reported costs at all, see also Dowell (1978, p. 136). This follows from the somewhat extreme assumption that traditionally monitored self-reporting of costs contains no useful information.…”

Section: Transfer Pricing and Income Shiftingmentioning

confidence: 99%

“…This can be implemented as alternative combinations of fixed fees and royalties. Osmundsen (1998) extends this to a two-period model, inspired also by Gaudet et al (1995). Lund (2002a), building on Gordon & MacKie-Mason (1995), instead has a model where taxes allow deductions for traditionally reported operating (or investment) costs.…”

Section: Transfer Pricing and Income Shiftingmentioning

confidence: 99%

Rent Taxation for Nonrenewable Resources

Lund

2009

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents inThe literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods which disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges, and leads to results which cast doubt upon the relevance of studies which neglect uncertainty. There are, however, several ways to analyze uncertainty, regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980's are promising, but still not in widespread use. Some more specific topics covered in this review are optimal risk sharing between companies and governments, time consistency and fiscal stability, the relationship between taxes and discount rates, and transfer pricing. JEL classification numbers: B20, H20, H25, L71, O13, Q38

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“…Ver Postali e Picchetti (2006) para mais detalhes. Para as propriedades dinâmicas da função custo na extração de recursos não renováveis, ver Osmundsen (1998). unitário de extração tende a crescer, devido à redução na pressão dos poços (efeito Jevons).…”

Section: O Modelounclassified

Regime fiscal, investimento em petróleo e opções reais

Postali¹

2009

Econ. Apl.

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ResumoO objetivo deste artigo é avaliar o impacto dos benefícios governamentais da indústria do petróleo no Brasil -royalties e Participações Especiais -na decisão de investir no desenvolvimento de reservas de petróleo. Utilizamos a metodologia de opções reais, que considera o valor das flexibilidades gerenciais no projeto de investimento. O modelo admite a opção de esperar e a opção de abandonar, no qual se simula o impacto de diferentes estruturas de alíquotas de royalties e de Participações Especiais sobre as razões preço-custo que determinam o desenvolvimento da reserva ou a saída da indústria. A partir de um experimento de Monte Carlo, estima-se uma trajetória para o preço e para o custo operacional, com vistas a avaliar as receitas esperadas para o governo sob cada estrutura de alíquotas. Os resultados sugerem que as Participações Especiais, apesar de seu potencial arrecadatório maior, podem retrair a decisão de investir tanto quanto (ou mesmo mais que) os royalties. Desta forma, a ampliação desta modalidade tributária, cuja discussão foi motivada pelas recém anunciadas descobertas do pré-sal, pode não ser uma boa iniciativa. AbstractThe aim of this paper is to evaluate the impact of the Brazilian petroleum fiscal regime -royalties and special participation tax -on the decision to invest in the development of oil and gas reserves in Brazil. We use the Real Option approach, which considers the value of managerial flexibilities. The model admits the option to wait and the option to abandon. It is simulated the impact of different royalties and special participation tax rates on the threshold price-cost ratios to develop the reserve and to exit the industry. Through a Monte Carlo experiment, it is also estimated a path for both prices and costs with the purpose of assessing the expected revenues to the government under each tax rate. Results suggest that special participation tax, despite its ability to increase revenues, is able to distort the decision to invest as much as (or even more than) royalties, which shows that extending this modality of tax, whose discussion was motivated by the just announced pre-salt discoveries, may not be a good initiative.

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Dynamic Taxation of Non-Renewable Natural Resources under Asymmetric Information about Reserves

Cited by 39 publications

References 6 publications

Rents to riches?: the political economy of natural resource-led development

Rents to riches?: the political economy of natural resource-led development

Rent Taxation for Nonrenewable Resources

Regime fiscal, investimento em petróleo e opções reais

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