Oil Taxes Essay Example | Topics and Well Written Essays - 3750 words

Oil Taxes - Essay ExampleCrude oil, as the cranky corporeal in the world market has effected changes that have affected the economic stability of countries. charm price changes has its usual negative implications, adverse supply shocks unexpectedly has created a critical scenario in the rock-bottom aggregate supply in the world oil market thereby increasing its prices. In the too soon 70s, OPECs control and reduction of oil prices according to Mankiw(1998)1 has aroused the world oil price instantly that has resulted to double-digit largeness and in high spirits unemployment rates. The changing prices of pugnacious oil have its usual implications on the economy that often results to a world oil crisis. At the moment, the world is witnessing a major oil crisis with the current war in Iraq and the ensuing conflict with the former(a) large oil producing countries in the Middle East. It is startling to note that material changes in the price of oil tooshie rapidly cascade to the w hole economy thereby affecting the price structures of consumer goods and services. The United States, as the highest consumer of the worlds oil stands at the loosing end thereby carefully fielding studies to allure the Gulf and Europe to limit their cuts. Former US Energy Secretary Richardson2(2000)has suggested in a youthful measure to limit the drastic impact on world economic slowdown by discussing the kindred between the world oil price market and the heavy taxation imposed by the political relation of oil-producing countries on oil production. According to OPEC, the barrel of refined oil has been split in to three crude oil price, industry margin and taxes. Governments who share the bulk of the profit are thereby enjoined to seriously detect their tax policies and exact measures to alleviate the prices of this main commodity.Mineral Taxation around the WorldThe current moves to stiff globalization aims to de-emphasize high tax rate, tie tax rate to additional profit or impose low but flat tax on all activities. Abu Dhabi, Dubai, Tunisia and Venezuela that have similar high tax rate do not share in production, plot of land Qatar, Egypt, Yemen and Argentina that share in production have tax rate ranging from 0-40%.73 Most of these countries have done away with royalty while others have rates ranging from 1-12%, which is based on the sliding scale tied to production. Let us case into the different taxation measures imposed by Azerbaijan and Kazakhstan, two minor oil producers who have every probable for economic gains and their implementation of tax reforms. As international capital flows are guided by the public fiscal regimes, there is a need for achieving some degree of harmonization. In this context, it is important to know what types of taxes can be expected on the oil sector industry. The dual nature further imposed on oil and gas as a special character of the mineral sector on other countries has equated the dual role of the government lea ding to the dilemma of whether taxation should be different in the mine sector and general system in terms of rate structure and administration. Taxes of general application whitethorn not always be suitable for mineral companies involving higher capital intensity and long-gestation lags. Further, it is difficult to evaluate whether the exemption of the mineral companies from