OIL CONTRACTS, PROGRESSIVE TAXATION, AND GOVERNMENT TAKE IN THE CONTEXT OF UNCERTAINTY IN CRUDE OIL PRICES: THE CASE OF CHAD

Industries such as those in the oil extraction sector can generate considerableincome. Therefore, applying a tax system that captures a greater part of the rentwhile providing incentives for exploration and development of new oil fields byinternational oil companies (IOCs) is a priority for developing nations that are alsooil producers. There is a specific tax system in the oil sector because of the sector’sspecial features, including massive investment and necessarily complex technologycontrolled by IOCs.1 The issue of rent sharing and, therefore, the tax system isa major challenge for Chad, whose economy is heavily dependent on oil. In 2013oil accounted for over 70 percent of Chad’s tax revenues, 90 percent of totalexports, and 30 percent of the nominal gross domestic product (GDP).