Intra-governmental fiscal relations
The study will examine how inter-organisational cooperation in the public sector may influence implementation of the policy reforms. The overarching aim is to examine which factors that facilitate and/or impede cooperation and coordination in the process of implementing petroleum legislation and regulatory reforms, including how different institutions’ perceived roles affect policy implementation.
The purpose of the research is to analyse policy consistency, decision-making processes and information flows between public agencies when designing and implementing fiscal policies for the petroleum sector. We will take context-specific market and government failures that cannot be removed easily into account. Our aim is to explore what can be done with respect to the choice of tax regime and fiscal arrangements, given the prevailing political and institutional constraints. The work will cover both revenue and expenditure management.
The work is organised in two sub-sections. The first will focus on revenue management; the second on expenditure management.
On the revenue side, key research questions are:
- What parts of the administration collect what types of taxes, royalties, surface rents etc. from the petroleum sector?
- What factors facilitate and/or impede cooperation and coordination in the process of implementing the petroleum tax/revenue legislation and regulations?
- How do problems of intra-governmental coordination and cooperation affect policy design and implementation?
- What may realistically be achieved with respect to the choice of tax regime and fiscal arrangements for the petroleum sector, given the political, institutional, and economic constraints prevailing in Tanzania? On the expenditure management side, key research questions are:
- What are the present and expected roles of the key institutions in expenditure decisions? What are the links and power relations between them? Any changes over time, and why?
- Is there a political consensus around the idea to establish a petroleum (sovereign wealth) fund?
- What is realistic to achieve given the prevailing political, institutional, and economic constraints? Back
An important part of this sub-component is to analyse public-private sector interactions in the design and implementation of fiscal policies. Particular emphasis will be put on the role of interest groups in shaping the petroleum tax legislation. The sub-component will address the following questions:
- How are the interactions and relations between the Government and domestic business associations and individual companies?
- Are there fora where domestic companies are directly involved in policymaking?
- What characterises the interactions and relations between the Government and individual petroleum companies?
- Do domestic and international companies engage lobbyists? How involved are they in shaping tax policies and practices? In what fora do they operate to influence policies and public opinion? Are there any conflicts of interest? Back
One of the big challenges a country faces upon the discovery of natural resources is to maintain, enforce, and further develop the non-resource tax system. Empirical evidence indicate that resource rich countries collect less domestic tax revenues than others.
This is a cause of concern because domestic taxation is not only important as a means for public revenue generation and diversification, but is increasingly also seen as a tool for promoting accountability and dialogue between a government and its citizens.
Non-resource tax revenue crucially depends on citizens’ support for, and willingness to pay, tax, as well as the Government’s willingness to enforce the tax system. In this sub-component, we therefore seek to investigate:
- Whether and how expectations about future gas revenues
- affect citizens political support for the non-resource tax system;
- affect government officials willingness to enforce and further develop the non-resource tax system; and
- fuel the potential for violent conflicts in Tanzania?
- If petro-expectations affect political support for non-resource taxation, willingness to enforce the tax system and the potential for violent conflict, how can petro-expectations be managed in a way that enhances economic and social development in Tanzania? Back