2013 minerals industry tax data survey – analysis of results

Executive Summary

This report summarises the results of the 2013 minerals industry tax data survey.

Background

In order to improve the quality and timeliness of data on which public policy debates are based, in 2010 the Minerals Council of Australia (MCA) commissioned Deloitte Access Economics (DAE) to assist it in collecting its own data on taxes paid by mining companies.

The 2013 survey is the third such data collection. It collected data relating to the 2010-11 and 2011-12 financial years. This report is based on the data collected.

The survey’s population frame is larger minerals resource companies. In total, 22 companies participated in the current survey. Of these, 10 had coal mining operations, 5 had iron ore mining operations, 6 had gold mining operations and 7 had operations in respect of ‘all other minerals’ (predominately copper, silver, lead, zinc and nickel). Most of the companies surveyed record annual revenue from minerals production in Australia in excess of $1 billion.

The main tax data collected relate to State and Territory royalties and Commonwealth company income tax. In the minerals sector, prior to the 2012-13 commencement for the Minerals Resource Rent Tax (MRRT) and the carbon tax, these are the key fiscal instruments used to collect mineral resource revenue. The survey does not include MRRT or carbon tax because these taxes were not in effect during the 2011-12 financial year.

The MCA survey data have been used to calculate “tax take” ratios. While equivalent official measures have sometimes used resource profits (or “rents”) as the denominator in tax take ratios, the analysis here uses taxable income (or the corporate tax base) before deducting royalties. While these are different concepts, the differences between them have been relatively small on average over most of the last decade.

2013 survey results

Chart i shows survey results for the total tax take indicator as calculated across all the surveyed miners. In the most recent survey year (2011-12), the total tax take (royalties plus company tax) was 41%.
Hence slightly more than two out of every five dollars of profit in the minerals sector are paid to Federal and / or State Governments as royalties and company taxes.

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