The Rent Taxation Concept for Solid Minerals Extraction and Recovery

Sergey D. Shatalov (), Milyausha R. Pinskaya (), Vitaly A. Prokaev () and Kermen N. Tsagan-Mandzshieva ()
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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

Finansovyj žhurnal — Financial Journal, 2023, issue 3, 9-24

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.

Keywords: mining rent; mineral extraction tax; additional income tax; multicomponent complex ore; solid minerals (search for similar items in EconPapers)
JEL-codes: D60 E20 L10 Q38 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:fru:finjrn:230301:p:9-24

DOI: 10.31107/2075-1990-2023-3-9-24

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