Possible reforms to the fiscal regime applicable to windfall profits in South Africa's liquid fuel energy sector

February 9, 2008

The possibility exists of excessive economic rent arising in the mining and sale of oil and gas resources. To address this the Task Team recommends that the tax authorities should either introduce a linkage between royalty levels and the respective commodity price curve in the Royalty Bill, or incorporate a progressive tax mechanism into the schedule of the Income Tax Act that ultimately replaces the OP26 mining lease currently in operation.

Windfall Tax Investigation 9 Feb 2007 (PDF, 1.4MB)

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