Fiscal Regime Research Articles

Taxation of Nigeria's Solid Mineral Resources: Prospects and Challenges

Nigeria is endowed with a number of mineral resources. The Federal Government of Nigeria, being the owner of these resources, formulates polices which guarantee it some compensation for allowing extraction of these resources. Among these policies is the fiscal policy which is aimed at ensuring that government gets benefit from the mining of these resources, subject to attracting the investment necessary to realize those benefits. This article examines the taxation of mineral resources (solid minerals in particular) in Nigeria vis-a-vis the various taxes payable by the various entities. In doing this, the various extant tax laws on are examined. The article further examines the challenges and the prospects of mineral taxation in Nigeria. It is discovered that though there are many opportunities in the mineral sectors in terms of revenue generation and employments, there are also factors mitigating against the optimal realization of the gains of the sector. The fiscal regime governing taxation of mineral resources has also been found to be one-sided. The regime focuses only on the petroleum resources development rather than solid mineral development. A good understanding of what opportunities offered by the sector as well as the challenges facing the realization of the same will go a long way in assisting the government re-positioning the sector. This is necessary in the wake of calls to diversify the nation’s economy from being solely oil-based.

Federalism, Fiscal Space, and Public Investment Spending: Do Fiscal Rules Impose Hard Budget Constraints?

The core emphasis of rules-based fiscal legislation at the subnational level in India is to achieve debt sustainability through a numerical ceiling on borrowing and the use of borrowed resources for public capital investment by phasing out revenue deficits. Using the Arellano Bond Panel estimation, this paper examines whether the application of fiscal rules has resulted in an increase in the fiscal space for public capital investment spending in major Indian states. This analysis shows that by controlling other factors, there is a negative relationship between fiscal rules and public capital investment spending at the state level during the rules-based fiscal regime.

Re-appraisal of the Bakken Shale play: Accounting for historic and future oil prices and applying fiscal rates of North Dakota, Montana and Saskatchewan

The ascent of the Bakken shale play as a major U.S. oil producer became threatened by the 2014–2016 oil price fall. This benchmark study assesses and compares the economic performance of typical Bakken wells across three different fiscal regimes: North Dakota (ND) and Montana (MT) in the U.S., and the Canadian province of Saskatchewan (SK). Decline curve analysis and discounted cash flow analysis are applied to evaluate and re-appraise both the productivity and economic performance (internal rate of return, IRR) of typical Bakken wells in each region. For wells of similar estimated ultimate recovery (EUR), the fiscal regime of Montana (IRR 27%) is slightly more advantageous than North Dakota's (IRR 24%). If wells can be identified in SK akin to ND's reference well of 555 Mbbls EUR, the Canadian province provides the most attractive after tax return (180%). However, type curves for Bakken wells in SK and MT analyzed in our study typically have EURs at only 14% and 37% of the ND reference well (EUR∼555 Mbbls) and IRRs adjusted for EUR in MT and SK are negative in both regions at the historic reference price of $80/bbl. A sensitivity analysis using oil prices ranging between $20–100/bbl accounts for any of the price levels seen in the 2014–2016 price fall, and can be projected forward. The evaluation of single well economics and sensitivity to oil price changes and drilling and completion cost is subsequently expanded with a representative firm approach considering certain asset development options with multiple wells in each of the three Bakken jurisdictions (ND, MT, SK).

Perspectives On Accounting and Fiscal Law of Crowdfunding in Romania

Abstract This paper aims to analyse the accounting and fiscal regime of crowdfunding and the legal framework for such operations in Romania. Crowdfunding provides support to project developers by enabling them to access finance in a simple and inexpensive manner. Thus we refer to the following: current state of crowdfunding operations and existing legal background for conducting such operations in Romania as well as possible directions for its improvement. We will also highlight the accounting and fiscal issues encountered by both companies that hold online crowdfunding platforms and those benefiting from the sums collected through this financing method. This paper is based on case study research method. Considering the fact that in Romania the functioning of the crowdfunding platforms is not yet regulated, the information and views set out in this article are those of the authors.

Dissecting fiscal multipliers under the fiscal theory of the price level

We derive analytical expressions for fiscal multipliers on output and inflation under the Fiscal Theory of the Price Level. In the associated ‘fiscal regime’, taxation multipliers turn positive, while the government spending multiplier has the same functional form as its counterpart in the ‘monetary regime’, augmented by a nominal wealth effect. As a result, fiscal multipliers tend to be larger in the fiscal regime, with the degree of price stickiness being a key determinant of their exact sizes. In particular, multipliers go to infinity as prices become fully fixed, and collapse to their equivalents in the monetary regime as prices become fully flexible. Standard calibrations suggest that the fiscal regime hosts a government spending multiplier on output that lies between 1 and 3. We also analyze the effectiveness of money-financed fiscal stimulus. In the fiscal regime, money-financed stimulus is equivalent to a particular form of debt-financed stimulus. The effectiveness of money-financed stimulus in raising output (relative to inflation) decreases as monetary policy becomes more responsive to inflation.

Petroleum Tax Competition Subject to Capital Rationing

The recent dramatic fall in oil prices has led to extensive capital rationing in international oil companies, and subsequent fierce competition between resource extraction countries to attract scarce investment. This situation is not adequately addressed by the large literature on international taxation and multinational companies, since it fails to take account of capital rationing in its assumption that companies sanction all projects with a positive net present value. The paper examines the effect of tax design on international capital allocation when companies ration capital. We analyse capital allocation and government take for four equal oil projects in three different fiscal regimes: the US GoM, UK upstream and Norway offshore. Implications for optimal tax design are discussed.

City as province in China: the territorial urbanization of Chongqing

Chongqing is a province-level city region in China’s interior with a land area larger than many small countries. Limited scholarship tends to treat Chongqing as a new jurisdiction formed in relation to development of the Three Gorges Dam and reform of historic state-planned industry from the Mao era. This analysis turns to the complex process of land redistricting in a process of “territorial urbanization” that has also simultaneously reshaped the economy of Chongqing. By conceptualizing Chongqing as a dynamic administrative territory, this analysis defines changes in the relational configuration of its administrative divisions (xingzheng quhua) as a multi-faceted state strategy of governing land use change and the fiscal regime to realize infrastructure development. Especially by establishing districts in Chongqing, territorial urbanization works to enhance the funding capacity of the Chongqing government to develop larger, expansive infrastructure projects. This urban transformation of Chongqing demonstrates how processes of land use change and government funding, materializing in the built environment, are directly related to changes in state territorial configuration.

Fiscal regime design elements and relative regime ranking for concessions

AbstractThe technological breakthrough in the oil and gas sector has made it possible for the companies to diversify their investment portfolio but it is quite challenging to select a balanced and stable regime to mitigate the country risks associated with investments especially in a volatile price environment. The project economics calculation to evaluate fiscal regime sometimes proves out to be a difficult task for corporate planners to model and make conclusions for investments. It is also a challenge for the government to maximize the revenue from their resources and for the contractor to choose a suitable investment destination. There is a scope in current fiscal analysis literature for a single indicator which can contribute towards the overall comparison of fiscal regimes. This paper will evaluate the design aspects of fiscal terms of a concession regime and will address the generic concern of fiscal regime evaluation through a Relative Fiscal Ranking (The Relative Fiscal Ranking is the evaluation of two or more fiscal regimes benchmarked against the most attractive fiscal regime with desired fiscal terms set/calculated by the investors.) methodology applied on a set of concession regimes. This method will directly establish a unique functionality between the fiscal terms and their attractiveness which will ultimately expose the relative risk associated with fiscal regimes when they are compared against each other. It generates key insights for investment decisions and can help the policy makers and corporate planners to take informed decisions.

Taxing the indigenous: a history of barriers to fiscal inclusion in the Bolivian highlands

ABSTRACTFollowing the electoral success of left wing and pro-indigenous President Evo Morales, the indigenous poor in Bolivia find themselves at the centre of a new vision of the state, echoed by a fervent citizenship project to include them as contributing participants in this new Bolivia. The state is working to initiate these hitherto informally employed subjects into an individualized fiscal regime: to make them into “taxpayers”. While the highland indigenous population have supported Morales’ political project, they resist inclusion into the broader state-sponsored project. This is not simply about avoiding financial obligations; their resistance is instead firmly rooted in the historical experience of fiscal exploitation, general suspicion of any state-run scheme as well as a clash of exchange models. I argue that in order to overcome these barriers, the Tax Office has to succeed in separating fiscal expansion from its association with an abstract state concept, and instead link it to palpable everyday life and politics, such as the union structure and Morales’ project of indigenous inclusion.

The Effects of Fiscal Targets in a Currency Union: A Multi-Country Agent Based-Stock Flow Consistent Model

We present an Agent-Based Stock Flow Consistent Multi-Country model of a Currency Union to analyze the impact of changes in the fiscal regime of member countries, that is permanent changes in the deficit-to-GDP targets that governments commit to comply. Simulations are performed under three scenarios differentiated for the number of member countries. Though we did not try to estimate empirically the parameters of the model, the configuration employed for our artificial Currency Union yields economically reasonable values for the dynamics of key economic variables, broadly comparable with historical data and available stylized facts, in particular referred to the Euro Area which constitutes the natural point of reference for our work. Our policy experiments show that fiscal expansions generally allow to improve the dynamics of real GDP, labor productivity, and employment, though being associated to higher levels of public debt. On the contrary, permanent fiscal contractions have always strong recessive effects and tend to be self-defeating when the Currency Union includes a higher number of countries and international trade between member countries is more prominent, exacerbating real GDP volatility both in the short and long run. The observed increase of average debt-GDP ratios in these scenarios seems to be mainly attributable to the raise of public debt-to-GDP in poorer and less productive countries, which is mirrored by a reduction of the countries’ net foreign asset position. In the conclusions we discuss current limitations of the model and we sketch out the future lines of development.

Can Russia Survive Economic Sanctions?

Motivated by recent events, we study the welfare impact of extreme sanctions regimes on Russia. To do so, we model the demographic and fiscal transitions of the Russian Federation under free trade and autarky. Unlike previous studies of sanctions, our paper utilizes a large-scale overlapping generations model with productivity growth, demographic change, region-specific policies, and an energy sector. This model is uniquely suited to understanding the long-term impacts of different trade and fiscal regimes. This paper investigates the most dramatic sanctions possible, forcing Russia into long-term autarky under a variety of scenarios. The scenarios differ with regard to the sanction's effect on the energy sector, labor productivity, and the enactment of Russian capital controls. We find that elderly Russians are hurt the most by sanctions. When Russia seizes foreign assets, this is in part because of lower interest rates on the assets of retirees. When the sanctions also reduce Russian government energy revenues, the elderly are hurt through increased consumption taxation. In all scenarios but the most benign, all existing generations are made worse off.

Can Russia Survive Economic Sanctions?

Motivated by recent events, this paper studies the welfare impact of extreme sanctions regimes on Russia. To do so, it models the demographic and fiscal transition of the Russian Federation under free trade and autarky. Unlike previous studies of sanctions, our paper utilizes a large scale overlapping generations model with productivity growth, demographic change, region-specific policies, and an energy sector. This model is uniquely suited to understanding the long term impacts of different trade and fiscal regimes. Consequently, this paper investigates the most dramatic sanctions possible, forcing Russia in to long term autarky, under a variety of scenarios. It is consider the role of Russian capital controls as a response to sanctions as well as impacts on labor productivity and the energy sector. The paper finds that older currently living Russian generations are hurt the most by the sanctions. When Russia seizes foreign assets, this is in part due to lower interest rates on the assets of retirees. When the sanctions also reduce Russian government energy revenues, the old are hurt through increased consumption taxation. In all scenarios but the most benign, all generations currently living are made worse off.

Business Cycles in an Oil Economy: Lessons from Norway

The recent oil price fall has created concern among policy makers regarding the consequences of terms of trade shocks for resource-rich countries. This concern is not a minor one – the world's commodity exporters combined are responsible for 15–20% of global value added. We estimate a two-country New Keynesian model in order to quantify the importance of oil price shocks for Norway – a large, prototype petroleum exporter. Domestic supply chains link mainland (non-oil) Norway to the off-shore oil industry, while fiscal authorities accumulate income in a sovereign wealth fund. Oil prices and the international business cycle are jointly determined abroad. These features allow us to disentangle the structural sources of oil price fluctuations, and how they affect mainland Norway. The estimated model provides three important results: First, pass-through from oil prices to the oil exporter implies up to 20% higher business cycle volatility. Second, the majority of spillover effects stem from non-oil disturbances such as innovations in international investment efficiency. Conventional oil market shocks, in contrast, explain at most 10% of the Norwegian business cycle. Third, the prevailing fiscal regime provides substantial protection against external shocks while domestic supply linkages make the oil exporter more exposed.

Petroleum Tax Competition Subject to Capital Rationing

The recent dramatic fall in oil prices has led to extensive capital rationing in international oil companies, and subsequent fierce competition between resource extraction countries to attract scarce investment. This situation is not adequately addressed by the large literature on international taxation and multinational companies, since it fails to take account of capital rationing in its assumption that companies sanction all projects with a positive net present value. The paper examines the effect of tax design on international capital allocation when companies ration capital. We analyse capital allocation and government take for four equal oil projects in three different fiscal regimes: the US GoM, UK upstream and Norway offshore. Implications for optimal tax design are discussed.

How Should Shale Gas Extraction Be Taxed?

This paper suggests that the environmental and commercial features of shale gas extraction do not warrant a significantly different fiscal regime than recommended for conventional gas. Fiscal policies may have a role in addressing some environmental risks (e.g., greenhouse gases, scarce water, local air pollution) though in some cases their net benefits may be modest. Simulation analyses suggest, moreover, that special fiscal regimes are generally less important than other factors in determining shale gas investments (hence there appears little need for them), yet they forego significant revenues.

How Should Shale Gas Extraction Be Taxed?

This paper suggests that the environmental and commercial features of shale gas extraction do not warrant a significantly different fiscal regime than recommended for conventional gas. Fiscal policies may have a role in addressing some environmental risks (e.g., greenhouse gases, scarce water, local air pollution) though in some cases their net benefits may be modest. Simulation analyses suggest, moreover, that special fiscal regimes are generally less important than other factors in determining shale gas investments (hence there appears little need for them), yet they forego significant revenues.

Lead Industry Address

At a time when energy security is the subject of intense debate in Australia, Mr Coleman will discuss the vital role that gas plays in delivering energy that is affordable, reliable and compatible with global efforts to reduce emissions. He will consider the contribution industry can make, but also what role governments can play. For government, a priority should be maintaining a stable fiscal regime that takes into account both the high costs of developing Australia’s remote resources and the long-term benefits of facilitating their development. Our industry needs to work with governments to ensure the provision of affordable and sustainable energy. The gas supply challenges in the Eastern States highlight the need for a national approach to energy security. The secure supply of energy is crucial for the functioning of Australia’s economy, and gas has a vital role to play as a safe energy source with a relatively low emissions intensity.

Uganda: Technical Assistance Report-Implementing Fiscal Regimes for Extractive Industries: Technical Notes

Uganda: Technical Assistance Report-Implementing Fiscal Regimes for Extractive Industries: Technical Notes

Editor's Column

Editor's Column John Zemke With this volume, "Parallelism in Verbal Art and Performance," prepared under the direction of guest editors Frog and Lotte Tarkka, Oral Tradition accommodates a baker's dozen plus one explorations into a technique for holding in poetic consciousness two or more complementaries of several different orders. The standard modus operandi of this column is to introduce by way of brief summaries, specific articles and how they stand in relation to one another. Frog and Lotte Tarkka's nearly exhaustive "Introduction," however, relieves me of the task, and affords me the opportunity to reflect on one aspect of the poetic experience that parallelism conjures: the apperceptive stilling of the successive advance of time, or in the words of Octavio Paz, the perception of "the present, the source of presences." How metering suspends the three dimensional fracturing of time and returns us to the experience of its elasticity, when: "the doors of perception open slightly and the other time appears, the real one we were searching for without knowing it: the present, the presence." For the full text of Octavio Paz's 1990 Nobel Prize acceptance speech, "La búsqueda del presente" ("In Search of the Present"), see https://www.nobelprize.org/nobel_prizes/literature/laureates/1990/paz-lecture-s.html. Now, poaching Frog's correspondence about the volume, the organization of these fourteen essays concerning different orders of parallelism reflects five touchstones, arranged by emphasis and approach: Meaning (Fox, Tarkka, Hull); Relation to verse (Kaartinen—repetition; Kallio—melody; Fabb—cognitive processes); Formal Typology (of verses—Holm and Saarinen, beyond verse—Frog I); Specific Traditions and Types (Stepanova, Cruz, Turpin); and, finally, Theorizing Parallelism and Embodied Performance (Lindfors, Frog II). It is, nonetheless, useful to review the scope of the languages of the poetic traditions reviewed: San Juan Quiahje Chatino, an Oto-Manguean language spoken in the highlands of Oaxaca, Mexico (Cruz); Western Sumatran Minangkabau, Ipili, Mongolian, Toraja, and Asmat (Fabb); Rotense, Tetun, and Atoni, (Fox); Finno-Karelian languages (Frog I); as well as Danish, English, Khanty, Lithuanian, and Old High German (Frog II); Zhuang, a form of Tai-Kadai spoken in the highlands of Western Guangxi, Southern China (Holm); Ch'orti', a Mayan language spoken in sourthern Guatelmala (Hull); Bandanese (tur wandan), spoken in two villages in the Kei Islands (Kaartinen); British and American English (Lindfors); the Ingrian dialect of Finnish, and the closely related Finnic languages Izhorian and Karelian (Kallio); Karelian (Stepanova); Arandic, a Pama-Nyugan language spoken in Central Australia (Turpin); and, finally, Karelian (Tarkka). This issue of Oral Tradition appears in virtual space thanks to the combined efforts of the staff of the Center for Studies in Oral Tradition—Mark Jarvis, Hannah Lenon, Lauren Anderson, Vida Bonney, Elise Broaddus, Katy Chenoweth, Emily Horn, Jennifer Spitulnik, Evelyn Yamoah, and Professor Sean Gurd. 2017 witnessed a profound reshaping of the human resources that manage the affairs of the Center for Studies in Oral Tradition. A new fiscal regime entailed the separation of Mark Jarvis, Hannah Lenon, and Jennifer Spitulnik from the Center on the last day of the month of June. Their absence, the loss of their intellectual contributions and collegiality profoundly affect accomplishing the work of the Center. I wish them continued success in all of their endeavors. Research Assistants Lauren Anderson, Vida Bonney, and Emily Horn have taken on new challenges that augur much success. Professor Sean Gurd's ambitious research agenda now requires his full attention. The absence of his advice and good work is sorely felt, yet I feel certain that the loss incurred by the Center will be amply compensated by the questions his research poses to Classical Studies and the rewards to be had in answering them. Finally, as is customary, I want to recognize the colleagues who referee submissions for Oral Tradition—they deserve special recognition and kudos, even in their anonymity. Their expertise and judgment informs every editorial decision and I am deeply appreciative of having their guidance. With their invaluable counsel all of us working on the journal can continue aspiring to the standards of scholarship established by the founding editor, John Miles Foley. Professor Foley worked tirelessly to ensure that Oral Tradition offer a venue for...

Federalism, Fiscal Space, and Public Investment Spending: Do Fiscal Rules Impose Hard Budget Constraints?

The core emphasis of rules-based fiscal legislation at the subnational level in India is to achieve debt sustainability through a numerical ceiling on borrowing and the use of borrowed resources for public capital investment by phasing out revenue deficits. Using the Arellano Bond Panel estimation, this chapter examines whether the application of fiscal rules has resulted in an increase in the fiscal space for public capital investment spending in major Indian states. This analysis shows that by controlling other factors, there is a negative relationship between fiscal rules and public capital investment spending at the state level during the rules-based fiscal regime.