Mining tax rate soars

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 21 Dec 2016   Posted by admin

The 2014-15 effective tax rate is the highest recorded level to date recorded by the survey. Image: 2016 MCA tax survey.

By Elizabeth Fabri

AUSTRALIAN miners are paying more than half their profits in taxes, according to new data released by Deloitte and the Minerals Council of Australia.

The 2016 MCA Annual Tax Survey found the minerals industry faced an effective tax rate of 54.3 per cent in 2014-15; an eight percent rise from the 46.3 per cent paid in 2013-14.

Minerals Council of Australia deputy chief executive David Byers said the tax ratio was the highest recorded since the survey began, and the first time it had exceeded 50 per cent.

“The effective tax rate has increased markedly over the last three years and compares to an average rate of 44.4 per cent over the eight years of survey data,” Mr Byers said.

“No other sector contributes such a share of its profit to state and federal governments.”

“The report should provide a final nail in the coffin of the proposal by WA Nationals’ leader Brendon Grylls to increase tax on WA iron ore producers by as much as $8 billion over the next four years.

“If the WA Nationals want to retain any economic credibility in the lead up to the state election they must ditch the proposal.”

Mr Byers said Australia’s company tax rate was now five percent above the developed country average, and eight points higher than Asia.

“State jurisdictions must also be cognisant of the need to keep the overall burden of mining taxation comparable with our international competitors,” he said.

“With profits low, royalties account for 60 per cent of tax collections in 2014-15.

“The high share of royalties reflects the fact that royalties do not take account of the profitability of the sector which endured tough conditions in 2014-15.”