The Russian Oil Tax Regime: A Comparative Perspective

Two American economists specializing in tax policy and the economy of Russia examine fiscal policies and instruments utilized by the Russian government to derive revenues from the country's oil production and exports, and compare these policies with relevant measures in Australia, Canada, Norway, the UK, and United States. The authors proceed to analyze the net present Value shares resulting from the development of an oil deposit that accrue to the government and to investors in Russia prior to 2007 and in 2009-January 2009 after adoption of changes in the fiscal regime. The analysis covers a variety of scenarios, including zero inflation and debt, positive inflation and debt levels, as well as price volatility. It yields, inter alia, a basic finding to the effect that the share of a project's net present value accruing to Russia's government is high in comparison with that in the other oil-producing countries discussed in the paper. Moreover, relative to its mean return, the Russian government bears significantly less risk than the investor. Journal of Economic Literature, Classification Numbers: C 150, E620, H250, L710, Q400. I figure, 10 tables, 44 references, appendix.