1.0 A price index number is a summary measure of the proportionate or percentage change in a set of prices over time. Export and import price indices (XMPIs) measure the overall change in the price component of transactions in goods and services between the residents of an economic territory and residents of the rest of the world. The prices of different goods and services all do not change at the same rate. A price index thus summarizes their movement by averaging over them. A price index assumes a value of unity, or 100, in some reference period. The value of the index for other periods of time provides the average proportionate or percentage change in price from the reference period.
The mismatch between where natural resources are found and where they, or their derivatives, are needed means that the business of finding, developing and selling them has for centuries been inherently international. The modern manifestation of this is the importance within the sector of large multinational enterprises – and their dominance where the state does not own all assets above the ground, as well as the resources below. Several state-owned enterprises have now themselves become important multinationals in the resource sector. Among resource-rich countries, for instance, multinationals account for the vast bulk of fiscal receipts from private business activity in the sector, especially in petroleum: in Ghana, Liberia, Peru and Trinidad and Tobago, they account for all such receipts (see Figure 1.1). In designing fiscal regimes for the extractive industries, international aspects – including the opportunities for tax planning by multinationals to avoid their liabilities – thus need to be center stage. This book aims to provide a comprehensive (and comprehensible) account of these sometimes difficult issues.
Mr. Liam P. Ebrill, Mr. Michael Keen, and Ms. Victoria J Perry
Value-Added Tax or VAT, first introduced less than 50 years ago, remained confined to a handful of countries until the late 1960s. Today, however, most countries have a VAT, which raises, on average, about 25 percent of their tax revenue.2 This chapter defines what is meant by a VAT; documents both the remarkable spread and the current reach of the tax; considers the differences between countries with and without the tax; and develops some stylized facts on the typical experience of countries that have adopted a VAT.