Mining Industry Expects to Pay $23.4 Billion in Taxes
MCA also Opposes Carbon Tax
For the year 2010/11, Australia's mining industry is expected to pay the federal and state governments a total of $23.4 billion in taxes and royalties.
The report, released Monday by the Minerals Council of Australia (MCA), discovered that the minerals industry actually paid an average tax rate of 41.5 per cent between 2007/08 and 2009/10, versus the claim by the federal Treasury that it only paid 27 per cent.
The dispute over the real tax rate was the subject of a debate between the government and industry in 2010 over the defunct resources super profits tax (RSPT). The MCA hinted that the federal Treasury used an unconventional method that led to the charge that the mining industry paid only an average of 27 per cent RSPT.
The basis of Labour was that charges on mining firms for non-renewable resources dropped from $1 for every $3 profit to $1 for every $7 profit in the past five years.
"Had they properly considered the official data, they could have reached no other conclusion than the effective tax rate of combined royalties and company tax was in excess of 41 per cent," MCA Chief Executive Mitch Hooke told news.com.au.
The federal government initially planned to hike RSPT rate to 40 percent, but the plan was dropped after Prime Minister Julia Gillard replaced Kevin Rudd. Gillard instead renegotiated the 30 per cent minerals resource rent tax (MMRT) with BHP Billiton, Rio Tinto and Xstrata.
If the MRRT would be introduced in Parliament and passed into law in 2011, the tax would be collected on mining firms beginning July 1, 2012.
The MCA recently opposed the new 6.2 cents per litre tax on fuel under the government's proposed carbon tax. In a submission on the proposed Clean Energy Future Legislation, the council warned that at least 1,500 Northern Territory businesses would be negatively impacted by the new levy.
MCA said the industries to be hit by the carbon tax include mining, construction, manufacturing, retail, wholesale trade, tourism, local governments and hospital and health care providers.
Peter Stewart, executive director of Northern Territory Division of the MCA, pointed out that the fuel tax went against the government's claim that only the top 400 major polluters will pay the carbon tax. He warned that the number of affected NT businesses would further rise to over 100,000 on July 1, 2014 when the tax would expand to include the road freight sector.
"It is a tax that will exacerbate the disadvantage of distance already suffered by NT businesses across all sectors," Mr Stewart said in a statement.