Research On Theory And Collection Method For Mineral Resources Royalties Based On Resource Rents

All mineral resources in China are publicly owned, and the resource rents can be earned by the government by the rights of ownership. In recent years, while China deepening the mineral resources taxation reform, some issues and contradictions still exist, which cause the loss of resource rents. There are mainly three problems related to literatures on mineral royalties:(1) The royalty is often builded on the theory of property rights and rents, less from the perspective of resource rents collection efficiency.(2) The collection method of royalty is mainly designed based on revenue or output according to kinds of mineral, less considerating collection efficiency, mining right management, economic efficiency and other factors.(3) The royalty rate is mainly estimated according to the indicators such as return on sales based on enterprise accounting data, less considering asset price changes, capital premium, investment risk and other factors.Based on the theoretical framework from resource rents, the paper estimates the levels of resource rents in mining based on the revised return model on capital, designs differentiated collection method by scale of mines and kinds of mineral, which enriches the theoretical framework of royalty, optimizes collection method of royalty, improves the estimation method of royalty rate. The main points and innovations of this paper are as follows:Firstly, building the theoretical framework from resource rents. The paper builds the theoretical framework from the size of resource rents and the efficiency of various collection methods on resource rents, which analyzes the influence of property rights, investor risks and mineral price on the size of the resource rents, discusses the efficiency of various collection methods on resource rents from the transferring of the mining rights and mineral extraction. The results indicate that the unclear ownership of mineral resources can lead to the loss of resource rents. The higher the risk preference and the mineral price are, the greater the resource rents are. The link, method and royalty rate of mineral royalties influence collection efficiency. The analysis framework is a theoretical support for the mineral royalties.Secondly, estimating the levels of resource rents based on the revised return model on capital. The paper studies the return on capital and its influential factors in mining, and compares the mining with industrial on return of capital, the differences of which determine the total level of resource rents in mining. The results indicate that resource rents significantly exist in mining except coal, but continue to decline after 2009. The return on capital in mining also faces a downward trend in future with China’s economic reform deepening. Estimating the levels of resource rents is helpful to set and adjust mineral royalties rate.Thirdly, designing differentiated collection method by scale of mines and kinds of mineral. The paper divides all of the mines according to the key factors identified, and chooses the optimal collection method according to potential economic efficiency, fiscal revenue, collection costs and fiscal risks. The results indicate the mines should be divided into four categories according to the scale of mines and kinds of mineral, each of which adopts differentiated methods of the sale of mining rights, production value based royalty and sales income based royalty, which help to improve the efficiency of mineral royalties collection. In the meantime, the paper puts forward the discount rate on the market price and sales income of the tungsten processed products to solve the issues of the enterprise internal pricing and sales income of processed products, which is based on building a regression equation for the cointegration test and the Granger test.