Oil Revenue Assignments: Country Experiences and Issues

November 1, 2002

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Format: Chicago

Eric Mottu, and Ehtisham Ahmad. Oil Revenue Assignments: Country Experiences and Issues, (USA: International Monetary Fund, 2002) accessed September 20, 2024

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

Based on country experiences, the paper assesses policy options to assign oil revenues to subnational governments (SNGs). The literature recommends that oil revenues be centralized. Given political economy considerations, this paper suggests that a possible alternative is to assign stable oil-tax bases to oil-producing SNGs, supplementing these with predictable transfers from the center. Although commonly used, oil revenue-sharing arrangements are the least preferable solution, as they complicate macroeconomic management and do not provide stable financing. Revenue sharing also does not diffuse separatist tendencies, since oil-producing SNGs would still be better off by keeping their oil revenues in full.

Subject: Commodities, Environment, Natural resources, Oil, Oil, gas and mining taxes, Revenue sharing, Subnational tax, Taxes

Keywords: Canada, Colombia, Federal government, Federation revenue, Gas and mining taxes, Gas revenue, Gas-revenue share, Income tax, Indonesia, Mexico, National government, Natural resource, Natural resources, Nigeria, North America, Oil, Oil revenue, Oil-producing countries, Oil-producing state, Oil-revenue fluctuation, Revenue base, Revenue sharing, Russia, Small nation, Subnational tax, Tax assignment, United Arab Emirates, United States, Venezuela, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/203
Stock No:

WPIEA2032002
ISBN:

9781451874464
ISSN:

1018-5941

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