Tax Allowances in Petroleum Industry Assignment

Tax Al misfortunateances in Petroleum Industry - Assignment sheathEarlier experiences from such attempts by other nations have been considered for comparative analysis of the factors. The paper comprises of four parts.Azerbaijan and Kazakhstan argon two states that broke away from the Russian federation after the fall of the former Soviet Union. They argon both members of the CIS and have immense wealth of mineral cover and crude deposits. Together they comprise much than a third of the CISs total energy reserves. However they are both classified as emergent developing states and as nascent states have it, the political economy of both countries suffer from huge administrative lethargy. Both countries bet heavily of the oil reserves and are striving to attract foreign investments in these sectors. Azerbaijan has made great leaps and has overtaken Kazakhstan in terms of volumetric performance of the oil sector. But as economists read out, its fiscal policies lack the complexity t o accommodate the sudden surge in revenue. Hence their revenue from oil will peak towards the end of the decade and then stabilise on a relatively low rate of declaration.Kazakhstan on the other hand has seen very little dramatic... It is in these contexts that the fiscal reforms of the countries have to be considered as far as reforms in the oil sector levyation will be studied.1. Overview of the tax brasss in Kazakhstan and Azerbaijan Oil IndustryTax system in Kazakhstan oil industryThe Taxation system in Kazakhstan is the most renowned model in the erstwhile Soviet Union. The Tax canon of 2002 implied an internationalist model of taxation, based on the principles of equity, economic neutrality and simplicity. During the year 1996, a Treaty on the Avoidance of Double Taxation was signed between United States and Kazakhstan. Kazakhstan has since signed 36 such agreements with divers(a) foreign governments until today1. The four main laws which govern the petroleum sector in Ka zakhstan are The Subsurface law of natureThe Petroleum LawThe Tax Code (2001)Law on Production Sharing Agreement for the stake of offshore oil dealings (zakhstan Oil and bodge Tax Guide)Taxation on Oil and GasThe new tax code that came in to force wef. 1st January 2002 has remarkably decreased the number of taxed sectors from a previous 53 to 36. The new code reflected better insight and clarity in the tax administration rather than the previous clumsy one. These new taxes were more detailed, and comprehensive. With this emerged a new framework on languish term taxation issues in the petroleum industry and for the first time, long term financial proviso and better feasibility studies could be effectively done by investors in the sector. The improved Tax Code which came in to effect from January 1, 2005 brought changes in tax regulations and lowered the economic load of investors considerably. The chief tax heads for companies dealing in the oil and gas sector are Corporate In come Tax, Value