A new report that was commissioned by the Minerals Council of Australia says that miners will pay close to $23.4 billion in tax to federal and state governments in 2010-11 financial year. Deloitte Access Economics said in the report that the mining industry has paid an average tax of 41.5% from the financial years between 2007-8 to 2009-10.
The report also said that the Federal Treasury’s claim that the mining industry paid just 27% tax in the last financial year during the debate over the defunct resources super profits tax were based on an unconventional method.
Mitch Hooke the council’s chief executive said that the government had decided to use the idea that the Australian public was not getting a fair share out of the mining boom to lay the foundation for an undisguised revenue grab by charging the industry with not paying its way.
This was simply not true as the Deloitte data had established that the royalty and company tax paid in the three fiscal years past from 2007 till 2010 had averaged 41.5% with extremely low variation in the three years.
Mr Hooke said that had the government 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.
This would have put paid to the RSPT which demanded a 40% tax on the mining industry right away. In any case the RSPT was shelved as Kevin Rudd was replaced by Julia Gillard. It was Gillard who renegotiated with BHP Billiton, Rio Tinto and Xstrata to lay the foundation of the Minerals Resources Rent Tax which was pegged at 30%.
The MRRT legislation is to be introduced in the parliament this year and is scheduled to be implemented starting next year. Under the MRRT, iron ore and coal miners will be able to claim rebates on royalties for tax.