A Comparison of Windfall Tax Methodologies in Different Fiscal Regimes

摘要

Designing fiscal regimes that maximize government take is not a simple task, as countries are tasked to develop an overall fiscal mechanism that optimizes government take while encouraging capital investment and domestic production. Windfall Profits Taxes ( WPT ) have been used to increase the percentage of government take in many countries. However, the terms , taxes billed as windfall taxes are often forms of taxation specific to the exploration and production (E&P) sectors of the oil and gas industry. A discussion, therefore, is needed to clarify the differences between the forms of taxation under the heading, windfall tax. In a period of historically volatile prices, it is crucial for both producers and governments to have a detailed understanding of the triggers and affects of such taxes in order to best prepare for the application of these additional levies. This paper aims to detail the differences in windfall profits tax schemes currently in use around the world and compare their effects on the division of revenues related to E&P activities. It will be shown that the triggers attributed to a Windfall Profits Tax are rarely profits; instead these triggers are at best indirectly related to profits.