A resource rent tax is a tax on the
rents gained on the exploitation of a resource.
It can cover both renewable and non-renewable resources. It is classically understood to be a tax on the
surplus value
In Marxian economics, surplus value is the difference between the amount raised through a sale of a product and the amount it cost to manufacture it: i.e. the amount raised through sale of the product minus the cost of the materials, plant and ...
generated by
resource exploitation
The exploitation of natural resources describes using natural resources, often non-renewable or limited, for economic growth or development. Environmental degradation, human insecurity, and social conflict frequently accompany natural resource ex ...
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
The Minerals Resource Rent Tax (MRRT) was a resource rent tax formerly imposed by the government of Australia on profits generated from the mining of non-renewable resources in Australia. It was a replacement for the proposed Resource Super Prof ...
covers rents in the mining industry. Norway introduced a resource rent tax on
aquaculture
Aquaculture (less commonly spelled aquiculture), also known as aquafarming, is the controlled cultivation ("farming") of aquatic organisms such as fish, crustaceans, mollusks, algae and other organisms of value such as aquatic plants (e.g. Nelu ...
(''i.e.'',
salmon and trout farming) in 2023, and resource rent tax on onshore
wind energy
Wind power is the use of wind energy to generate useful work. Historically, wind power was used by sails, windmills and windpumps, but today it is mostly used to generate electricity. This article deals only with wind power for electricity ...
effective January 1, 2024. In Iceland, a resource rent tax has been placed on fishing industry profits. In Switzerland, there is a resource rent tax on
hydropower
Hydropower (from Ancient Greek -, "water"), also known as water power or water energy, is the use of falling or fast-running water to Electricity generation, produce electricity or to power machines. This is achieved by energy transformation, ...
.
Some other countries that apply resource rent tax can be listed as follows:
* Australia
* United Kingdom
* Canada and British Columbia
* Russia
* Azerbaijan
* Madagascar
* Ghana etc...
See also
*
Georgism
Georgism, in modern times also called Geoism, and known historically as the single tax movement, is an economic ideology holding that people should own the value that they produce themselves, while the economic rent derived from land—includ ...
*
Land value tax
A land value tax (LVT) is a levy on the value of land (economics), land without regard to buildings, personal property and other land improvement, improvements upon it. Some economists favor LVT, arguing it does not cause economic efficiency, ec ...
*
Mineral tax
References
{{Reflist
Georgism
Natural resource management
Tax reform