The proposed resource super tax may lend a huge competitive edge to Canada’s mining industry, Canadian finance minister Jim Flaherty said.
Following the announcement of the proposed 40% tax on mining profits and the concerns raised as to its potential to frighten investment, Flaherty said that his country has been continually declining its corporate tax rates.
With Canada expecting to see corporations charged a combined 25% tax rate by 2012, it will act as a “great attraction for investment” into the nation’s mining industry.
Flaherty said that they will closely review the Henry Tax Review’s proposed changes.
The “easiest thing” for a politician to do is raise taxes, which immediately increases revenues, but limits growth, Flaherty said.
The Canadian minister’s sentiments have been echoed by within Australia as the tax is seeing fierce opposition from Australian miners, with magnates such as Clive Palmer and Tony Sage stating that due to the tax they will now look offshore for future projects, in particular Indonesia and Western Africa respectively.