Principles and Practice of Resource Rent Taxation

Abstract

The Henry Review placed the taxation of rents from mines back on the national policy agenda. Mineral rent is potentially a source of neutral taxation. However, the various means of taxing resource rents in practice either fall short of the ideal of neutrality or collect for the revenue only a small proportion of the mineral rent. This article discusses the six principle instruments for taxing resource projects. It evaluates these forms of taxation in relation to stability, neutrality and government revenue maximisation. It suggests a combination of instruments that is likely to establish a good balance among objectives. Show more