Mining tax figures misleading: MP
Australian mining companies paid an effective tax rate of 51 per cent in 2015-16 in company tax and royalties, according to a report produced by Deloitte Access Economics for the Minerals Council of Australia.
Based on a survey of 25 Australian mining companies, the report found miners paid more than half their profit in taxes; however, the report has come under fire for using taxable income plus royalty expenses, rather than actual tax paid, in a bid to show miners pay their “fair share”.
MCA interim chief executive David Byers said the study busted the myth Australian mining companies paid little or no tax.
“By paying its fair share of company tax and royalties, the Australian minerals industry helps to fund the schools, hospitals, police and other essential services on which Australians depend,” he said.
“Australia’s world-class mining sector could make an even greater contribution to our economy and society if the company tax rate — currently the fifth-highest in the 35-member OECD — was reduced.”
The report also highlighted the historical average effective tax rate was 45 per cent, 6 per cent lower than what was seen in the 2015-16 financial year.
Member for North West Central Vince Catania criticised the data, saying it was not accurate because royalties were a tax-deductible payment, similar to a baker purchasing flour to make bread.
“The Minerals Council continually promotes the idea that the royalties that their members pay to the people of WA are a tax similar to the company taxes that they pay to the Federal Government,” he said. “Royalties are in fact a tax-deductible payment to the people of WA to purchase the minerals ... when the resource royalty payments are removed from the figures promoted by the Minerals Council, the effective company tax rate that mining companies are paying is 15 per cent, well below what most people in WA would think is ‘paying their fair share’.”
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