MINERALS INDUSTRY TAX SURVEY 2014

The 2014 Minerals industry tax survey finds that in the most recent survey year (2012-13) the minerals sector paid nearly half of every dollar of profit as royalties and company tax to State and Federal Governments in Australia.

The total tax take ratio as calculated across all the surveyed miners was 47.1%. The ratio refers only to company tax and royalties to allow ready comparison with survey results from previous years. It does not include other taxes, including the Minerals Resource Rent Tax (MRRT) and the carbon tax, which were also levied in 2012-13.

This is the third consecutive year in which the tax burden has increased on the sector, and the highest recorded level since the survey was inaugurated in 2011.

The total tax take ratio for the industry has averaged 42.5% based on six years of survey data from 2007-08 to 2012-13.

The survey also shows that the royalties ratio of 24.4% exceeded the company tax ratio for the first time since the survey began. The reason was simple – company tax is directly linked to profits (which fell sharply), whereas royalties are not.

Moreover, this trend is likely to have further to run. With commodity prices having fallen further since mid-2013, the tax ratio is expected to rise again in 2013-14 which will be assessed in next year’s survey.

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