Aussie mining tax compromise reached...
July 1st 2010 22:28
Aussie mining tax compromise reached...
Australia's government will introduce separate tax regimes for the onshore petroleum industry and coal and iron ore under a compromise deal with miners to be announced early on Friday, according to media reports.
Iron ore and coal would be taxed at a rate lower than the 40% originally proposed while the onshore petroleum and gas industry will be taxed at a 40% rate and under similar terms as the offshore sector, the Australian Financial Review said, citing sources with knowledge of the deal.
The trigger point for the tax would also be raised to around 12%, up from an earlier proposal for around 5%, with the exact rate depending on 10-year Australian government bonds.
The rate will apply on the market value of miners' existing assets rather than the book value as first proposed, which is expected to ease concerns the tax would apply retrospectively, the paper said.
To save some cash, the compromise deal is expected to exclude an earlier proposal for a 40% up-front rebate and an exploration rebate.
The government had originally expected the new mining tax to raise $12 billion over the two years to July 2014, and had earmarked the money for infrastructure spending and to fund a cut in the company tax rate from 30% to 28% by mid-2014.
The government had warned that any shortfall in the mining tax revenue would likely come out of planned infrastructure spending or could prompt a delay or rethink on company tax cuts and plans to increase employer-funded pension benefits.
Treasurer Wayne Swan has repeatedly said any cut in revenue from the mining tax would not impact the government's forecast A$1 billion budget surplus in the year to June 30, 2013.
The proposed mining tax threatens more than $20 billion in investment, according to mining companies, but no major project has yet been scrapped and several have actually been advanced since the tax was unveiled on May2 .
Prime Minister Julia Gillard is scheduled to announce the deal at a press conference at 10.30am (NZT) on Friday.
Acknowledgemets: TVNZ- Reuters
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