Baunsgaard (2001:26) “examined petroleum fiscal systems for a number of developing countries and discovered that the majority of countries sampled use royalties to ensure an up – front revenue stream. Most of the countries used value-added tax royalties where the rates varied between 2 and 30%, while the most common range would vary between 5 and 10%”.
Mommer’s (1999:6) studied Oil Fiscal Regimes and observed that it may be divided into two broad classification; ‘liberal’ or ‘proprietorial’ .Liberal fiscal regimes are characterized by zero marginal fiscal take, where the Host Government taxes only excess profits, and are very careful not to disrupt the flow if investment. Here, taxes are purely based on net income


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