Lease allocation systems , risk aversion and the resource rent tax {
نویسنده
چکیده
This article examines the case of a risk-averse mining ¢rm facing a resource rent tax in order both to incorporate the role of the risk-sharing quality of such a tax and to assess its implications given a government's lease allocation system. The model develops the conditions required for an investment-neutral RRT characterised by a threshold rate of return r and a rate of tax t and suggests that for an auction system of lease allocation, government revenue could be maximised by setting the tax rate below 100 per cent, but that for a discretionary system, it is in the government's interest to introduce an RRT which is e¡ectively rate-ofreturn regulation.
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