Insight

Indirect taxes: hindering investment at low prices

This report is currently unavailable

This report is currently unavailable

Get this Insight as part of a subscription

Enquire about subscriptions

Already have a subscription? Sign In

Further information

Pay by Invoice or Credit Card FAQs

Contact us

Submit your details to receive further information about this report.

For details on how your data is used and stored, see our Privacy Notice.
 

Report summary

In this environment, only low-cost investment projects will be approved so, in the meantime, the industry is pursuing as many cost cutting initiatives as it can.  But in some countries, this impetus is being hindered by governments that target spending as a source of tax revenue. The main indirect taxes are value added tax, import duty and withholding tax on sub-contractor services.  Such ‘stealth’ taxes are highly regressive and have a significant influence on the competitiveness of a country for upstream investment. With the potential to add over 50% to the cost base in some cases, they could deter investors from drilling wells or taking FID. Governments that want oil companies to continue investing need to play their part.  Those that provide exemption from indirect taxes, or administer efficient refund systems, will have a competitive edge.  Those that insist on retaining such taxes need to consider the negative impact they could have on future investments, especially exploration.

What's included

This report contains

  • Document

    Indirect taxes: hindering investment at low prices

    PDF 708.88 KB

Table of contents

Tables and charts

This report includes 9 images and tables including:

Tables

  • The three main Indirect Taxes
  • Indirect taxes: hindering investment at low prices: Table 5
  • Different VAT scenarios
  • WHT application
  • WHT and implied profitability: Indonesia example

Images

  • Some current indirect taxation debates
  • The impact of indirect taxes on project IRR
  • EMV: with no indirect taxes
  • EMV: with indirect taxes

Questions about this report?

  • Europe:
    +44 131 243 4400
  • Americas:
    +1 713 470 1600
  • Asia Pacific:
    +65 6518 0800