Alternative Forms of Mineral Taxation, Market Failure and the Environment

Author/Editor:

Timothy R. Muzondo

Publication Date:

July 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 92/49

Subject:

Notes:

Also published in Staff Papers, Vol. 40, No. 1, March 1993.

English

Publication Date:

July 1, 1992

ISBN/ISSN:

9781451971729/1018-5941

Stock No:

WPIEA0491992

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

44

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