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Aus Govt Unveils MRRT Revenue Figures

by Mary Swire,, Hong Kong

13 February 2013

The Australian Government has revealed details of the revenue so far generated by the controversial Minerals Resource Rent Tax (MRRT), with the amount raised falling dramatically below that forecast.

The MRRT entered into force on July 1, 2012, and applies to the mining of iron ore and coal in Australia at a rate of 30%. According to the Government, it is expected to raise AUD13.4bn (USD13.8bn) by 2015-16 and is intended to fund a AUD3.6bn "Benefits of the Boom" package, as announced in the 2012-13 Budget.

The target set for the 2012-13 year is AUD2bn, but the figures released by Treasurer Wayne Swan show that revenue taken amounted to just AUD126m for the first two quarters. Defending the shortfall, Swan said: "It's clear revenues from resource rent taxes have taken a massive hit from the impact of continued global instability, commodity price volatility and a high dollar. Revenues across the board are down very substantially - MRRT is a profits-based tax that raises more revenue when profits are higher and less when they are lower."

The Government had been under pressure to unveil the results of the much-maligned tax and Swan said the information had been released in the interests of supporting increased transparency in the tax system. The news was seized on by the opposition Liberal party, which has been at the forefront of the campaign to get the figures published. According to a statement, the Government had held off doing so because it is "embarrassed about the absolute failure of the MRRT."

The party believes that a drop in profits cannot be the only explanation, and that instead the "growing value of royalty credits and the depreciation provisions in the MRRT Heads of Agreement give significant shelter from the MRRT." The Liberals claim that they would scrap the tax if in government.

TAGS: tax | mining | Australia | tax authority | tax rates | revenue statistics | tax reform

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