Oh well. I was supposed to keep quiet while my new job reviews whether it is cool for me keep my blog active. But this is one of those “I hate to say I told you so” moments. Cue The Hives.
As you can see from the previous post, I have dedicated a lot of attention to Australia’s Mineral Resource Rent Tax and questioned whether the tax would raise revenues to the extent suggested by the Australian Treasury. Well my answer came this week in the media from Sam Welsh, executive director of Rio Tinto. Mr. Walsh said : “The final tax rate had been reduced from 40% to an effective 22.5% rate in the minerals resource rent tax (MRRT)” and also added that it was the best that could be done with the current Government.
Industry 1. Australian Government – 7.5%
An effective rate 22.5 compares favourably to the 28% statutory rate applicable to all corporate profits. Although I am comparing effective and statutory rates, it appears fair to conclude from the large gap in those rates that in negotiating, the industry took advantage of the Government’s unwillingness to concede defeat and got itself a tax rebate.