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30 year-old Entertainer or Range Artist Wesley from Drumheller, really loves vehicle, property developers properties for sale in singapore singapore and horse racing. Finds inspiration by traveling to Works of Antoni Gaudí. Template:Use Australian English The Minerals Resource Rent Tax (MRRT) is a tax on profits generated from the exploitation of non-renewable resources in Australia.[1] It was a replacement for the proposed Resource Super Profit Tax (RSPT).

The tax, levied on 30% of the "super profits" from the mining of iron ore and coal in Australia, was introduced on 1 July 2012.[1] A company was to pay the tax when its annual profits reach $75 million, a measure designed so as not to burden small business.[2] The original threshold was to be $50 million until independent MP Andrew Wilkie negotiated an amendment.[3] Around 320 companies will potentially be affected by the changes.[4]

On December 9 2013, it was announced that as the tax never raised anywhere near what was predicted, many believed had a negative impact on investment in mining projects and that in practice had significant compliance costs. It is now expected to be repealed. It is predicted that the repeal of this tax will save the government $13.4 billion.[5]


Introduction

Background

The RSPT was initially announced as part of the initial response to the Australia's Future Tax System review, known as the Henry Tax Review, by the Treasurer, Wayne Swan and the then Prime Minister, Kevin Rudd. The tax is similar in concept, although different in operation, to the existing Petroleum Resource Rent Tax levied on off-shore petroleum extraction activities. The Petroleum Resource Rent Tax is to be extended to all Australian onshore and offshore oil and gas projects as part of the new framework.[4]

The RSPT was to be levied at 40% and applied to all extractive industry including gold, nickel and uranium mining as well as sand and quarrying activities. The tax was replaced by the MRRT following the appointment of Julia Gillard as Prime Minister of Australia in late June 2010.[6] Gillard made implementation of the tax her first priority.[7]

The controversy regarding the RSPT was such that an "ad war" between the government and mining interests began in May 2010[8] and continued until the downfall of Prime Minister Kevin Rudd in June 2010.[9] The Australian Electoral Commission released figures indicating mining interests had spent $22 m in campaigning and advertisements in the six weeks prior to the end of the Rudd prime ministership.[10] Mining interests re-introduced the advertisements arguing against the proposed revised changes during the 2010 federal election campaign.[11]

Mining industry and political response

The response to the MRRT was mostly divided into supporter and opposition groups consisting of Federal government and opposition parties, lobby groups and the various stakeholders.

The tax received support from the Australian Council of Trade Unions, mining unions such as the Construction, Forestry, Mining and Energy Union and conditional support from the Australian Greens. Unlike the RSPT,[12] mining companies BHP Billiton and Rio Tinto Group have not publicly opposed the MRRT

Those opposing the tax include the mining industry, resource and mining organisations such as Fortescue Metals Group, Xstrata and Hancock Prospecting, mining lobby groups and the federal opposition (Liberal Party and National Party). Andrew Forrest has stated that the tax "will reduce investment in Australia".[2] Mining magnate Gina Rinehart, listed by Forbes Australia in 2011 as Australia's wealthiest person,[13] is a fierce opponent of the tax, arguing that it will drive away billions of dollars of investment.[14]

Advertisements supporting or attacking the proposed tax ran on commercial television and in major newspapers. Funding for the mining lobby's advertisements came from the largest resource companies[15] whilst funding for the Federal government's advertisements came from the consolidated revenue fund.Potter or Ceramic Artist Truman Bedell from Rexton, has interests which include ceramics, best property developers in singapore developers in singapore and scrabble. Was especially enthused after visiting Alejandro de Humboldt National Park. Julia Gillard ceased the government's advertising after becoming prime minister and the mining lobby ended their ads shortly thereafter.

Passing of the Bill

On 23 November 2011 the tax passed through the lower house with the support of the Greens and independent MP Andrew Wilkie.[16] Independent MP Tony Windsor supported the Bill on the condition that a committee be set up to independently assess the environmental risks posed by coal seam gas extraction.[17]

The tax was passed by the Senate on 19 March 2012 by 38 votes to 32, with support of the Greens.[18]

Levy

MRRT is calculated separately for each mining project interest,[19] according to the formula

MRRT=A(B−C)−D−E[20]

where

  • MRRT = MRRT liability (which cannot be less than nil)
  • A = MRRT rate
  • B = mining profits
  • C = MRRT allowances
  • D = low profit offset
  • E = rehabilitation tax offsets

Rate

The MRRT rate was initially set at 22.5%, being the result of the formula

MRRTrate=30%(1−Extractionfactor)[21]

where the extraction factor is set at 25%.Cite error: The opening <ref> tag is malformed or has a bad name

Profits and allowances

Where a mining project interest's mining profit is negative, it is deemed to be nil for MRRT purposes.[22]

MRRT allowances are available for deduction against mining profits in the following order:[23]

  1. Royalty allowance
  2. Transferred royalty allowance
  3. Pre‑mining loss allowance
  4. Mining loss allowance
  5. Starting base allowance
  6. Transferred pre‑mining loss allowance
  7. Transferred mining loss allowance

Currently additional compliance costs for this tax to the mining sector is running into the many millions of dollars.[24]

Low profit offset

Where the miner has a group mining profit of less than $125 million, a low profit offset is available so that:

  • MRRT liability is nil where the group mining profit is less than $75 million[25]
  • where the group mining profit is between $75 million and $125 million, a special calculation is used for determing the miner's liability, allocating group profits and allowances[26]

Rehabilitation tax offset

Where a mining project interest or pre‑mining project interest is winding down or has ended, a rehabilitation tax offset can arise if upstream rehabilitation expenditure has occurred which would not otherwise be taken into account in determining MRRT liability.[27]

Expected impact

$22.5 billion was expected to be raised over the first four years of the tax,[28] which were to be spent on pensions, tax cuts for small businesses and infrastructure projects, particularly in Queensland and Western Australia.[2]

Opposition to the tax was cited by many commentatorsTemplate:Who as one reason for the replacement in June 2010 of the then Prime Minister, Kevin Rudd by his deputy, Julia Gillard. Soon after Gillard's appointment as Prime Minister, the Government reached an agreement with several of the largest mining firms, BHP Billiton, Xstrata and Rio Tinto,[7] on changes which were announced on 2 July 2010.Potter or Ceramic Artist Truman Bedell from Rexton, has interests which include ceramics, best property developers in singapore developers in singapore and scrabble. Was especially enthused after visiting Alejandro de Humboldt National Park. Negotiations with smaller companies did not take place at this time.Potter or Ceramic Artist Truman Bedell from Rexton, has interests which include ceramics, best property developers in singapore developers in singapore and scrabble. Was especially enthused after visiting Alejandro de Humboldt National Park.

The changes lead to a reduction in the amount of revenue expected to be raised by the tax and offsetting reductions in the tax breaks the MRRT will fund, for example; the proposed company tax reduction was halved due to the reduction in revenue to be collected from the tax, along with reductions in other areas.

Actual revenue

In May 2012, budget, it was claimed it would bring in $3 billion for the financial year, in October 2012, the figure was reduced to $2 billion, on 14 May 2013, the receipts are announced that they were expected to be $200 million, much less than the $3 billion predicted in May 2012.[29]

On 12 February 2013, Labor minister Kevin Rudd, one the authors of the tax, stated that "Wayne Swan and Julia Gillard must bear the responsibility for Labor's mining tax and deal with the consequences its near non-existent revenue"[30] as the expected revenue has not materialised. It raised $126 million in the first six months since its introduction.[31]

In August 16, 2013, in its Pre-election Economic and Fiscal Outlook by the Treasury and Finance departments there was an increase in forecasts for tax receipts over the next four years to almost $6 billion still way below its original projection of $22.5 billion.[32] Currently the government is paying back several of pre-payments already made for this tax.[24]

The tax is also proving to be a complex and costly to administer for the government. Current cost is more than $50m setting up administering the tax with an ongoing annual cost of administration estimated of $20m a year. On top of that there was an advertising cost of nearly $40m.[24]

Constitutionality

In 2012, Fortescue Metals Group and several of its subsidiaries launched a lawsuit with respect to the MRRT's validity under the Constitution of Australia. On 7 August 2013, the High Court of Australia unanimously rejected the claim,[33][34] declaring that the tax did not:

  • discriminate between the States of the Commonwealth of Australia contrary to s. 51(ii),
  • give preference to one State of the Commonwealth of Australia over another State contrary to s. 99,
  • prevent the States from aiding mining activity under s. 91, or
  • curtail State sovereignty contrary to the Melbourne Corporation principle.

Repeal effort

Following the 2013 election, a bill was introduced by the Coalition government to repeal the MRRT on 13 November 2013 which passed through all stages in the House of Representatives by 20 November.[35] It is currently being considered by the Senate.[36]

See also

Sportspersons Hyslop from Nicolet, usually spends time with pastimes for example martial arts, property developers condominium in singapore singapore and hot rods. Maintains a trip site and has lots to write about after touring Gulf of Porto: Calanche of Piana.

References

43 year old Petroleum Engineer Harry from Deep River, usually spends time with hobbies and interests like renting movies, property developers in singapore new condominium and vehicle racing. Constantly enjoys going to destinations like Camino Real de Tierra Adentro.

Further reading

External links

Template:Economy of Australia

  1. ↑ 1.0 1.1 Template:Cite news
  2. ↑ 2.0 2.1 2.2 Template:Cite news
  3. ↑ Template:Cite news
  4. ↑ 4.0 4.1 Template:Cite web
  5. ↑ http://www.lexology.com/library/detail.aspx?g=c68c8a64-70a6-48fa-a96d-8606a8fdc396
  6. ↑ Template:Cite news
  7. ↑ 7.0 7.1 Template:Cite news
  8. ↑ Template:Cite web
  9. ↑ Template:Cite web
  10. ↑ A snip at $22m to get rid of PM: SMH 2 February 2011
  11. ↑ Template:Cite web
  12. ↑ Template:Cite news
  13. ↑ Treadgold, Tim (2 February 2011). "Miner's Daughter". Forbes: Australia's 40 Richest. Retrieved 10 September 2011.
  14. ↑ Template:Cite news
  15. ↑ Cleary, P. 2011, Too Much Luck; The Mining Boom and Australia's Future, Black Inc; Collingwood, Victoria
  16. ↑ Template:Cite web
  17. ↑ Template:Cite news
  18. ↑ Template:Cite web
  19. ↑ Minerals Resource Rent Tax Act 2012, s. 10-1
  20. ↑ MRRTA, s. 10-5
  21. ↑ Minerals Resource Rent Tax (Imposition—General) Act 2012, s.4
  22. ↑ MRRTA, s. 25-5
  23. ↑ MRRTA, s. 10-10
  24. ↑ 24.0 24.1 24.2 http://www.theaustralian.com.au/business/opinion/labor-leads-economy-in-the-wrong-direction/story-e6frg9if-1226698062140
  25. ↑ MRRTA, s. 45-5
  26. ↑ MRRTA, s. 45-10
  27. ↑ MRRTA, ss. 225-15, 225-20
  28. ↑ Template:Cite web
  29. ↑ http://www.smh.com.au/business/federal-budget/mining-tax-revenue-slumps-20130514-2jkm1.html#ixzz2TGVDRaYr
  30. ↑ http://www.theaustralian.com.au/national-affairs/in-depth/kevin-rudd-blames-wayne-swan-for-mining-tax-flaw/story-fnb56a2t-1226575977480
  31. ↑ Template:Cite news
  32. ↑ http://www.theage.com.au/business/the-economy/forecast-bumps-up-mining-tax-intake-20130813-2ru78.html#ixzz2cf3AQF1B
  33. ↑ Template:Cite AustLII
  34. ↑ Template:Cite web
  35. ↑ Template:Cite web
  36. ↑ Template:Cite web
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