Alternative Forms of Mineral Taxation, Market Failure and the Environment

Timothy Muzondo

No 1992/049, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the environmental effects of mineral taxes in a framework that recognizes the importance of rates and cumulative externalities and proposes an appropriate corrective tax. It concludes that mineral resources taxation should combine neutral taxes with a dynamic Pigovian type tax proposed in the paper. Such a tax resembles a specific tax plus an element that depends on the amount of remaining reserves. This resemblance means that, in practice, specific taxes may act as proxies for environmental taxes. The paper also points at complementarities and tradeoffs between economic and environmental concerns that could arise in reforming mineral taxes.

Keywords: WP; rate of interest; rates of extraction; rent tax; cash flow; output tax; corrective tax; tax package; depletion date; lump-sum tax; Resource rent tax; Non-renewable resources; Natural resources; Environmental taxes (search for similar items in EconPapers)
Pages: 44
Date: 1992-07-01
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Citations: View citations in EconPapers (2)

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