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The marginal cost of public funds of mineral and energy taxes in Peru

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  • Vásquez Cordano, Arturo L.
  • Balistreri, Edward J.

Abstract

We estimate the Marginal Cost of Public Funds (MCPF) for Peru using a detailed computable general equilibrium (CGE) model. Revenues from all major sources (including taxes on factors of production, natural resources such as energy and minerals, consumption, and imports) are examined. Our focus is on the efficiency implications of mineral and energy taxes, given their importance to Peruvian public finance. The primary data are from the Global Trade Analysis Project (GTAP) as modified to include detailed tax information from the Peruvian Ministry of Economy and Finance and the Peruvian Internal Revenue Service. Consistent with the theories of public finance, we find that the MCPF is greater for activities that face high or widely varying tax rates. The taxes on energy and mineral activities represent a clear illustration of this relationship. The results presented in this paper indicate opportunities to improved efficiency in the current tax mix, and also indicate the financing costs of proposed expenditures that would be funded with taxes on energy and natural resources.

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  • Vásquez Cordano, Arturo L. & Balistreri, Edward J., 2010. "The marginal cost of public funds of mineral and energy taxes in Peru," Resources Policy, Elsevier, vol. 35(4), pages 257-264, December.
    • Handle: RePEc:eee:jrpoli:v:35:y:2010:i:4:p:257-264
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    2. Yu Liu & Meifang Zhou, 2018. "The Impact Of Coal Resource Tax Reform On The Chinese Economy: A Cge Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(03), pages 555-565, June.
    3. Arturo Vásquez & Raúl García & Edwin Quintanilla & Julio Salvador & David Orosco, 2012. "Acceso a la Energía en el Perú : Algunas Opciones de Política," Working Papers 29, Osinergmin, Gerencia de Políticas y Análisis Económico.
    4. Dante A. Urbina & Gabriel Rodríguez, 2023. "Evolution of the effects of mineral commodity prices on fiscal fluctuations: empirical evidence from TVP-VAR-SV models for Peru," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 159(1), pages 153-184, February.
    5. Pinglin He & Lu Chen & Xiaonan Zou & Shufeng Li & Huayu Shen & Jianhui Jian, 2019. "Energy Taxes, Carbon Dioxide Emissions, Energy Consumption and Economic Consequences: A Comparative Study of Nordic and G7 Countries," Sustainability, MDPI, vol. 11(21), pages 1-17, November.
    6. Kalkuhl, Matthias & Fernandez Milan, Blanca & Schwerhoff, Gregor & Jakob, Michael & Hahnen, Maren & Creutzig, Felix, 2017. "Fiscal Instruments for Sustainable Development: The Case of Land Taxes," MPRA Paper 78652, University Library of Munich, Germany.
    7. Umberto Monarca & Ernesto Cassetta & Alessandro Sarra & Cesare Pozzi, 2015. "Integrating renewable energy sources into electricity markets: Power system operation, resource adequacy and market design," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2015(2), pages 149-166.
    8. Kalkuhl, Matthias & Fernandez Milan, Blanca & Schwerhoff, Gregor & Jakob, Michael & Hahnen, Maren & Creutzig, Felix, 2018. "Can land taxes foster sustainable development? An assessment of fiscal, distributional and implementation issues," Land Use Policy, Elsevier, vol. 78(C), pages 338-352.
    9. Mitkova Veronika & Jánošová Miroslava, 2019. "The Tax Burden CGE Analysis for Slovakia and Slovenia," Naše gospodarstvo/Our economy, Sciendo, vol. 65(4), pages 35-46, December.
    10. Zhang, Zengkai & Guo, Ju'e & Qian, Dong & Xue, Yong & Cai, Luping, 2013. "Effects and mechanism of influence of China's resource tax reform: A regional perspective," Energy Economics, Elsevier, vol. 36(C), pages 676-685.

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