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Improving Mineral Taxation Policy in Australia*
Author(s) -
LLOYD CRAIG EMERSON and P. J.
Publication year - 1983
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1983.tb00812.x
Subject(s) - commonwealth , economics , state (computer science) , production (economics) , tax policy , public economics , tax reform , tax rate , microeconomics , macroeconomics , law , algorithm , political science , computer science
Australian State governments have begun to increase royalty rates and other mineral taxes. The most instructive approach to taxation policy for the minerals sector is to set up a general model of mines which year the optimal structure of taxes. A model of mine production under uncertainty is presented. The optimal tax is a single tax with two parts. a bonus bid and conditional tax payments based on the ex‐post rent of the mine. The actual structure of taxes levied by State and Commonwealth governments is seen to be distinctly sub‐optimal in several respects. Proposals to move the actual to word the optimal structure are made, recognizing some of the constraints on information and the maximum acceptable rate of tax reform .