NEW RESEARCH CONFIRMS MINING INDUSTRY PAYS ITS FAIR SHARE OF TAX
The minerals industry in 2013-14 faced a tax ratio of 47 per cent (including company tax and royalties) according to the annual Minerals Industry Tax Survey released today by the Minerals Council of Australia (MCA).
This figure is an equal record high for the survey and does not include others taxes, such as the Minerals Resource Rent Tax and the carbon tax which were also levied in 2013-14.
As Deloitte Access Economics notes in its survey report, ‘the minerals sector paid nearly half of every dollar of profit as royalties and company tax to State and Federal Governments in Australia’.
With the tax reform debate in full swing, this survey demonstrates that mining is among the highest taxed industries in Australia.
With other countries taking steps to improve their tax competitiveness, Australia needs further tax reform to ensure it remains a competitive destination for mining investment.
As part of the survey, the MCA also commissioned Deloitte Access Economics to provide updated industry-wide estimates for company tax and royalties in 2014-15 (a year beyond the data available from the survey).
As expected, revenues to government in 2014-15 are estimated to have fallen as commodity prices and profits have declined sharply. Nonetheless, at $12.6 billion in company tax and royalties, they are significantly higher than in the years preceding the mining boom.
Taxes paid have moved in tandem with total revenues peaking in 2011-12 ($24.5 billion) with commodity prices. This underlines the fact that company tax works effectively as a ‘profits tax’.
Over the decade from 2005-06 to 2014-15, the minerals industry paid an estimated $165 billion in Federal company tax and State royalties alone.
That’s roughly equivalent to Federal spending on higher education and schools and more than was spent on public hospitals and childcare over the same period.
The Report can be read here: http://bit.ly/1O95Yuh