Fiscal Regimes for Natural Resources

Financial revenues are one of the most important benefits a country receives for the extraction of its non-renewable natural resources. A deal that is equitable for both the country and investors will be more durable than those that are too generous to either side. Knowing what constitutes a fair deal is, however, an enormously difficult task, and even once the terms are agreed, designing a fiscal regime that will achieve the anticipated sharing of benefits over a long-term, volatile and inherently unpredicatable investment lifecycle is immensely complex. The VCC is researching several aspects of designing and implementing a fiscal regime in an attempt to find elements of a legal and fiscal regime that can help avoid unanticipated consequences or disputes between the investor and the government over the course of the investment.

In addition, the Center is examining whether and what constraints governments have under international law to modify their legal and fiscal regimes and tax policies, and what steps governments can and have taken to protect their policy flexibility in this area.

The overall objective is to equip governments with a better understanding of the policy tools available to them when it comes to extractive industry fiscal regimes.