Minerals Resource Rent Tax

The Minerals Council of Australia (MCA) welcomes the announcement that the Australian Government supports the recommendations on the Minerals Resource Rent Tax (MRRT) made by the Argus-Ferguson Policy Transition Group (PTG).

This is a further step in delivering renewed confidence to the Australian minerals industry consistent with the July 2010 Heads of Agreement between the Gillard Government and major mining companies. The Government?s support for the recommendation that all State and Territory royalties should be credited vindicates the industry?s position on the clear language of the Heads of Agreement. That debate is over.

The task now is to enshrine key recommendations in forthcoming legislation, allowing no room for slippage either via political horse-trading or regulatory back-tracking. As well as the crediting of State and Territory royalties, this includes key provisions on the tax rate, the extraction allowance, the taxing point and valuation processes. These provisions must be embedded in the core legislation and not deferred to regulation.

The MCA also welcomes the Government?s commitment to further close consultation with industry on draft legislation via the Resource Tax Implementation Group. There are outstanding issues in relation to a small number of PTG recommendations which appear to cause unnecessary administration or uncertainty and/or are not aligned with existing business practices.

The Government should ensure the Implementation Group is given a real mandate to advise on administrative design and implementation, consistent with maintaining the integrity of the overall package of recommendations. This is needed to avoid unnecessary disputes and to minimise administrative complexities. This process should include further consultation to take account of the unique circumstances of integrated coal-fired power generators.

Two members of the MCA Standing Committee on Taxation, Brian Purdy (Vice President Tax ? Asia Pacific, BHP Billiton and current Chair of the Committee) and Anthony Portas (Head of Tax ? Asia Pacific, Anglo American) are on the Implementation Group.

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