Mining tax take to grow, or not

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Treasury continued its internationally embarrassing confession (I’m pleased to report yesterday’s MRRT serve went viral in New York overnight), about the mining tax. From the AFR:

Treasury secretary Robert Heferen told the committee late on Thursday night that his office would work with the Australian Taxation Office to work out why miners had reduced their instalments to such a great extent, falling well below the latest revenue estimate for the year of $2 billion.

“It’s not necessarily the case you can think about that [$126 million] as being a function of the miners’ expected profit over 12 months, because of how the equation works,” Mr Heferen said.

Under the minerals resource rent tax, miners must pay an instalment rate of 8 per cent on iron ore revenues and 3 per cent of coal revenues, but they can vary that down if they can justify it.

…Companies could have a number of reasons to vary, including changes in commodity prices and royalties payable that they can use as a credit, and Mr Heferen described it as a “pretty reasonable” thing to do in the presence of volatile exchange rates and prices.

Apparently the tax take might rise by year end. Or not. Who knows? Not the folks running it.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.