Resource rent tax explained

A resource rent tax is a tax on the rents gained on the exploitation of a resource.^[1] It can cover both renewable and non-renewable resources. It is classically understood to be a tax on the surplus value generated by resource exploitation beyond the necessary costs of production (which includes rewards to capital). An investor enjoys relief from taxation until a certain rate of return has been achieved, at which point profits are shared with the host government.

Resource rent taxes are particularly prevalent in mining and petroleum industries. Australia's Minerals Resource Rent Tax covers rents in the mining industry.^[2] Norway introduced a resource rent tax on aquaculture (i.e., salmon and trout farming) in 2023,^[3] and resource rent tax on onshore wind energy effective January 1, 2024.^{[4] [5] [6]} In Iceland, a resource rent tax has been placed on fishing industry profits.^[7] In Switzerland, there is a resource rent tax on hydropower.^[8]

See also

• Georgism
• Land value tax
• Mineral tax

Notes and References

1. Lund . Diderik . 2009 . Rent Taxation for Nonrenewable Resources . Annual Review of Resource Economics . en . 1 . 1 . 287–308 . 10.1146/annurev.resource.050708.144216 . 1941-1340. 10419/47338 . free .
2. Garnaut . Ross . 2010 . Principles and Practice of Resource Rent Taxation . Australian Economic Review . en . 43 . 4 . 347–356 . 10.1111/j.1467-8462.2010.00616.x . 0004-9018.
3. News: March 28, 2023 . Norway government lowers fish farm resource tax proposal to 35% . Reuters.
4. News: 2024-03-07 . How Wind Power and Indigenous Rights Clashed in Norway . Bloomberg News . en.
5. News: 2023-05-11 . Norway Delays Plan for Onshore Wind Tax After Industry Outcry . Bloomberg News . en.
6. News: Insights. New wind in the sails for onshore wind power in Norway?. DLA Piper. Helge Neraal, Fredrik Verling, Ingrid Elise Ruud, Johan Eikrem. April 2024.
7. Gunnlaugsson . Stefan B. . Kristofersson . Dadi . Agnarsson . Sveinn . 2018 . Fishing for a fee: Resource rent taxation in Iceland's fisheries . Ocean & Coastal Management . 163 . 141–150 . 10.1016/j.ocecoaman.2018.06.001 . 0964-5691.
8. Banfi . Silvia . Filippini . Massimo . 2010 . Resource rent taxation and benchmarking—A new perspective for the Swiss hydropower sector . Energy Policy . 38 . 5 . 2302–2308 . 10.1016/j.enpol.2009.12.017 . 0301-4215.