Tuesday, March 20, 2012
Australia imposes 30 per cent tax on iron ore and coal mine profits
The government has been fighting for two years with mining companies over the level of new taxes. The Green party which supports the Labor bill wanted to raise the rate to 40 per cent and include other mining groups. The Labor Party too originally had planned for a 40 per cent tax rate on mining.
Passage of the laws represents a great win for Julia Gillard the prime minister. She passed the laws in spite of leading a minority government. Green Party members helped.
The taxes will hit some industry giants including Rio Tinto, BHP Billiton, and Xstrata. The tax will generate 11.2 billion (U.S.) in revenue over the first three years.
Gillard said in defense of the bill:"Australians know how important the mining industry is, but they also know that we can only dig up and sell the resources once," "The Minerals Resource Rent Tax will deliver Australians with a fair return on the resources they own 100 per cent.""The Gillard government believes all Australians should share in the benefits of the mining boom, not just a fortunate few,"
Mining groups oppose the tax. In particular small and medium size mining groups complained that the tax was so complicated that compliance with the terms would be difficult and expensive for smaller and medium size mines. For more see this article.