Taxing Natural Resources—New Challenges and New Perspectives


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Fiscal Affairs Department, International Monetary Fund
Co-sponsored by the governments of Norway (NORAD), the United Kingdom (DfID), and Germany (GTZ)

September 25–27, 2008
HQ1, Meeting Halls A & B, IMF Headquaters, Washington, D.C.                             

Soaring prices for oil, gas and mineral resources have heightened interest in the design of tax instruments—and similar measures, such as production-sharing agreements—that provide a reasonable allocation of risk and return between governments and investors, and which ensure efficient resource use and discovery. To encourage discussion of these complex and topical issues, and the identification of good practices, the Fiscal Affairs Department of the IMF is holding a conference on this topic in Washington D.C. on September 25-26, 2008, with discussion of opportunities and issues in the provision of technical advice on September 27, 2008.

The conference is intended mainly for government officials active in the area, and will have a technical focus. Among the topics to be covered are:

  • What are the main strengths and weaknesses of the core instruments—royalties, rent taxes, PSAs, and so on—that are available? Can windfall taxes play a useful role?
  • What are the main trends and current issues in the taxation of oil, gas, and minerals?
  • What methodologies are available to assess the economic impact of alternative tax arrangements on particular projects?
  • What particular challenges do tax administrations face in relation to natural resources, and how can these be overcome?
  • What are the key international tax issues in this area?
  • Should fiscal stability clauses be provided, and if so in what form?
  • What are (and should be) the fiscal implications of state participation?

The Managing-Director of the IMF, Dominique Strauss-Kahn, is expected to open the conference. Keynote speakers on the two full days will be Paul Collier (Oxford) and Michael Ross (UCLA). Session speakers will include Robin Boadway (Queens University), Petter Osmundsen (University of Stavanger), Lindsay Hogan (Australian Bureau of Agriculture and Resource Economics), Jack Calder (formerly UK Oil Taxation Office), together with other independent experts, and staff from the IMF and World Bank. There will be ample time for discussion, and the papers will subsequently be published as a Handbook of Resource Taxation.

Discussants will include representatives of governments, of civil society organizations, and of international companies working in resource sectors.

The special session on Day 3 of the conference (September 27) will be devoted to technical assistance issues related to fiscal regimes for resource sectors. In recent years, much attention has been given to issues of revenue transparency, and of avoiding the “resource curse,” and less to the design of tax policy or fiscal regimes for these sectors. FAD has experienced a large increase in demand for its technical assistance in this area, the Norwegian Oil for Development Program has expanded significantly, and DfID and GTZ have renewed interest in the topic, especially in Africa. The World Bank aims to broaden its assistance across the chain of extractive industry activity from granting of licenses or contracts to the spending of revenues. What do countries see as their main current and future needs for advice and support in relation to resource taxation? How useful have they found external advice—and how can it be made more effective?

Participants in the special session on technical assistance will include Ministers and officials from resource-rich countries, and from those aspiring to become so, together with assistance providers, civil society organizations, and Fund and Bank staff.

The conference will complement other efforts on the vital topic of resource management. It will provide an opportunity for intensive exchange of views among practitioners from a wide range of countries and expertise. The proposed Handbook will aim to crystallize the proceedings, providing a resource for those charged with policy design.

Agenda

Thursday, September 25

9:00 a.m.–9:15 a.m.

Opening Address—Dominique Strauss-Kahn, Managing Director, IMF

9:15 a.m.–9:30 a.m.

Introductory Remarks—Teresa Ter-Minassian, Director, Fiscal Affairs Department, IMF

9:30 a.m.–10:30 a.m.

Theoretical Perspectives on Resource Tax Design
 

Chair: Tony Venables (University of Oxford and DfID)
 

Speakers: Robin Boadway (Queens University, Canada), and Michael Keen (IMF)

 

Discussants: Robert F. Conrad (Duke University) and
Jean-François Wen (University of Calgary)

10:30 a.m.–11:00 a.m.

Coffee

11:00 a.m.–12:30 p.m.

Experience and Issues in Resource Taxation
 

Chair: Petter Nore (Oil for Development Program, NORAD)
 

Speakers: (1) Minerals Taxation—Lindsay Hogan (Australian Bureau of Agricultural and Resource Economics)

 

(2) Petroleum Taxation—Petter Osmundsen (University of Stavanger, Norway);1

 

Discussants: Craig Andrews (World Bank), Silvana Tordo (World Bank)

12:30 p.m.–2:30 p.m.

Lunch, with Keynote Address—Michael Ross (UCLA)
 

Chair: Sanjay Pradhan (World Bank)

2:30 p.m.–3:45 p.m.

Resource Tax Administration
 

Chair: Catherine Allen Kagina (Director General, Uganda Revenue Authority)
 

Speaker: Jack Calder (Former Deputy Head, UK Oil Taxation Office), Charles McPherson (IMF)

 

Discussants: David Kloeden (IMF), Keith Tucker (Anglo American)

3:45 p.m.–4:15 p.m.

Coffee

4:15 p.m.–5:30 p.m.

Evaluating Resource Tax Regimes
 

Chair: Matthias Witt (GTZ)
 

Speaker: Philip Daniel, Brenton Goldsworthy, Wojciech Maliszewski, Diego Mesa Puyo (all IMF) and Alistair Watson (IMF roster of experts)

 

Discussants: Daniel Dumas (Commonwealth Secretariat)

6:00 p.m.–7:00 p.m.

Reception

Friday, September 26

9:00 a.m.–10:30 a.m.

Resource Rent Taxes, and State Participation
 

Chair: Rolando Ossowski (IMF)
 

Speaker: (1) Bryan Land (World Bank): Resource Rent Taxation—Theory and Experience

 

Discussant: Thomas Baunsgaard (IMF)
 

Speaker: (2) Charles McPherson (IMF): State Participation in the Natural Resource Sectors: Evolution, Issues, and Outlook
 

Discussant: Thomas Dalsgaard (DONGEnergy)

10:30 a.m.–11:00 a.m.

Coffee

11:00 a.m. –12:30 p.m.

International Tax Aspects, and Natural Gas
 

Chair: Douglas Townsend
 

Speaker: (1) Peter Mullins (formerly IMF): International Tax Issues for the Resources Sector

 

Discussants: Alan Fischl (PriceWaterhouse Coopers),
 

Speaker: (2) Graham Kellas (Wood McKenzie): Taxation of Natural Gas Projects

 

Discussant: Richard Ruggiero (Gaffney, Cline & Associates)

12:30 p.m.–2:00 p.m.

Lunch, with Keynote Address—Paul Collier (University of Oxford).
 

Chair: Carlo Cottarelli (IMF)

2:00 p.m.–3:30 p.m.

Fiscal Stability, and Auctions
 

Chair: Karin Lissakers (Revenue Watch Institute)
 

Speaker: (1) Emil Sunley (formerly IMF) and Philip Daniel (IMF): Contractual Assurances of Fiscal Stability

 

Discussant: Joseph Bell (Revenue Watch Institute/Hogan and Hartson LLP)
 

Speaker: (2) Peter Cramton (University of Maryland): Auctions

 

Discussant: Russell Krelove (IMF)

3:30 p.m.–4:00 p.m.

Coffee

4:00 p.m.–5:15 p.m.

Roundtable Discussion:
 

Chair: Teresa Ter-Minassian (IMF)
 

Panel:
 

Stephen Blythe (BP )
 

Corinna Gilfillan (Global Witness)
 

John Groom (International Council on Metals and Minerals)
 

Stig Sollund (NORAD)
 

Roberto Ugarte (Ministerio De Hacïenda, Bolivia)
 

Tony Venables (DfID)

Saturday, September 27
Technical Assistance in Resource Taxation

The objective of this session is to exchange views and information on assistance that is available, and on the main needs and difficulties that recipients and others see, and to discuss ways to build on the dialogue established at the conference.
 

Chair: Antoinette Sayeh (Director, African Department, IMF)

9:00 a.m.–10:00 a.m.

TA Providers' Perspective
 

Speakers:
 

Philip Daniel (IMF)
 

Paulo de Sa (World Bank)
 

Petter Nore (Director, Oil for Development, NORAD)
 

Tove Strauss (AfDB)
 

Tony Venables (DfID)

10:00 a.m.–11:00 a.m.

Industry and Civil Society Perspective
 

Speakers:
 

Joe Bell (Revenue Watch Institute)
 

Yedwa Simelane, (AngloGold Ashanti)
 

Dan Witt (ITIC)

11:00 a.m.–11:30 a.m.

Coffee

11:30 a.m.–12:45 p.m.

Country Views
 

Speakers: Officials present at the event—to be identified.

12:45 p.m.–1:15 p.m.

Next steps—Continuing the dialogue

1:15 p.m.–1:20 p.m.

Closing remarks—Teresa Ter-Minassian (Director, Fiscal Affairs Department, IMF)

Note: Views expressed in these papers and presentations are those of the authors alone, and should not be attributed to the IMF, its Executive Board or its management.
1 This presentation will also draw on "Time Consistency in Petroleum Taxation-The Case of Norway."