Mining’s fair share

Mining does not pay its fair share of tax. Mining has paid $117 billion in company tax and royalties since 2006-07.

Mining paid $21 billion in 2011-12 alone – double its payment in 2006-07.

Mining’s tax take has been high and stable averaging in excess of 40 per cent over the past five years.

The tax take from Australian iron ore and coal producers is in the top quartile of countries - the global average is around 39 per cent.
Mining’s effective tax rate is 17 per cent. ATO statistics show mining’s effective tax rate was 28 per cent in 2010-11.

Including royalties, mining’s effective tax rate was 40 per cent in 2010-11.

The mining industry paid more than $14 billion in company tax in 2010-11 which was 23 per cent of total company tax in Australia.

Treasury officials have acknowledged that: “the application of the company tax to the resources sector has acted as a de facto resource rent tax”.
The MRRT has led to a massive revenue shortfall compared with the RSPT. Claims that the MRRT created a revenue “shortfall” of more than $100 billion are not credible.

Decade-long revenue projections for the RSPT (released by Treasury in February 2011) are based on the flawed premise that the RSPT would not distort investment and production.

Dr Ken Henry has demolished the credibility of the projections stating that: “There is something actually quite unreasonable about producing 10-year revenue estimates for a tax like this... Those numbers are of such poor reliability that I was very reluctant to see those numbers in the public domain.”

Analysis by Deloitte Access Economics shows that if the RSPT had been in place, mining companies would have been refunded $900 million in the first six months because the RSPT included a refund for state royalties.

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