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The Rent Taxation Concept for Solid Minerals Extraction and Recovery

Author

Listed:
  • Sergey D. Shatalov

    (Financial Research Institute, Moscow, Russian Federation)

  • Milyausha R. Pinskaya

    (Financial Research Institute, Moscow, Russian Federation)

  • Vitaly A. Prokaev

    (Ministry of Finance of the Russian Federation, Moscow, Russian Federation)

  • Kermen N. Tsagan-Mandzshieva

    (Financial Research Institute, Moscow, Russian Federation)

Abstract

The article considers the conceptual approaches to the taxation of natural resource use. The purpose of the article is to identify the governmental tax risks in the implementation of various scenarios of mining rent withdrawal and to substantiate the methodology of resource taxation in extraction and processing of solid minerals, based on the principle of tax justice. The authors reveal the factors of tax risks for the state in exercising its sovereign right to the mining rent. The article formulates the requirements to the tax system, the observance of which will allow to consider the factors of the state tax risks. Advantages and disadvantages of certain fiscal payments for extraction of mineral raw materials are determined. It is shown that the resource tax should be based on the present value, calculated as the net present value of the investor for the entire lifetime of the project. The authors propose a mining rent taxation mechanism, which would increase budget revenues while maintaining the incentives for mining companies to invest in exploration. The main forks in the design of such a rent income tax are shown.

Suggested Citation

  • Sergey D. Shatalov & Milyausha R. Pinskaya & Vitaly A. Prokaev & Kermen N. Tsagan-Mandzshieva, 2023. "The Rent Taxation Concept for Solid Minerals Extraction and Recovery," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 9-24, June.
    • Handle: RePEc:fru:finjrn:230301:p:9-24
    DOI: 10.31107/2075-1990-2023-3-9-24
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    References listed on IDEAS

    as
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    4. James Otto & Craig Andrews & Fred Cawood & Michael Doggett & Pietro Guj & Frank Stermole & John Stermole & John Tilton, 2006. "Mining Royalties : A Global Study of Their Impact on Investors, Government, and Civil Society, Appendixes," World Bank Publications - Books, The World Bank Group, number 7136, December.
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    More about this item

    Keywords

    mining rent; mineral extraction tax; additional income tax; multicomponent complex ore; solid minerals;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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