Revenue Allocation under the MRRT: Economic Aspects
14 Pages Posted: 12 Nov 2012
Date Written: November 12, 2012
Abstract
The Minerals Resources Rent Tax (MRRT) is intended to tax the rents properly attributed to minerals at the time and place of their extraction, i.e. at the mouth of the mine. However, mining operations involve a degree of vertical integration that in some cases extends from mine to port. We examine the approach adopted in the MRRT to allocating the resulting revenues as between the taxing point and the downstream operations and show that it both lacks economic rationale and is likely to distort build/buy decisions.
Keywords: mining, tax, rents, vertical integration
Suggested Citation: Suggested Citation
Ergas, Henry and Robson, Alex R. W., Revenue Allocation under the MRRT: Economic Aspects (November 12, 2012). Available at SSRN: https://ssrn.com/abstract=2174688 or http://dx.doi.org/10.2139/ssrn.2174688
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