Are there economic limits to efficient taxation in mineral and petroleum fiscal regimes?
Anaghara Obiageli Phina firstname.lastname@example.org ABSTRACT: Every government strives to put in place a fiscal regime that is attractive to investors and at the same time secures a flow of revenue for the government. Government should seek therefore, to take more of the economic rent by the use of certain fiscal tools geared towards achieving this. The concept of economic rent is central to any discussion on efficient taxation of natural resources. The host government is entitled to a considerable portion of rent generated from the mines and oil fields by virtue of the ownership rights which are vested in the state. However taxation of these resources may prove to be economically inefficient where due to the wrong use of tax instruments, development of the resources results in a waste. The intention of this paper is to examine the limitations of certain tax systems in efficiently targeting the rent, thereby making the system tough from the investor’s perspective.