There are few areas of economic policy-making in which the returns to good decisions are so high—and the punishment of bad decisions so cruel—as in the management of natural resource wealth. Rich endowments of oil, gas and minerals have set some countries on courses of sustained and robust prosperity; but they have left others riddled with corruption and persistent poverty, with little of lasting value to show for squandered wealth. And amongst the most important of these decisions are those relating to the tax treatment of oil, gas and minerals.

A book recently published by the IMF - "The Taxation of Petroleum and Minerals: Principles, Problems and Practice" - consolidates and takes forward current knowledge in the field of natural resource taxation. Rather than prescribing best practice, the book concentrates on core principles, criteria and methods to apply in a variety of circumstances, targeting both an academic and practitioner audience. Drawing on the public finance and resource taxation literature—which have developed largely independently of one another to date—and insights from the extensive technical assistance provided by the IMF Fiscal Affairs Department in this area, the book combines theory and practice.

The book begins with an overview of concepts and low income country issues related to natural resource taxation. In particular, a combination of features makes taxing resources special – including the substantial size and of economic rents and tax revenues; international considerations; the exhaustibility of resources; and the challenges posed to investors by uncertainty and time consistency. Issues in the oil, minerals and gas sectors are addressed separately, and chapters are dedicated to special topics of evaluation, resource rent taxes, state participation and auctions. Further chapters address implementation issues related to revenue administration and international taxation, as well as the stability and credibility of fiscal regimes. Events to launch the book have already taken place in Britain; others will follow in late June, in Australia and Uganda—the latter in the form of a large pan-African conference-and in September, in Washington.