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The debate over the mining industry’s tax bill heated up again today, with a new Australia Institute survey claiming the sector pays less tax than others.
According to the AI paper, including their deductions for capital expenditure mining companies paid an average company tax rate of 13.9 per cent.
The report excluded royalties in its calculation on the grounds they were considered “input costs.”
The report puts weight behind claims made by the Gillard Government about the mining tax rate, and directly contradicts a study released on Monday by Deloitte Access Economics.
Deloitte’s study, commissioned by the Minerals Council of Australia, reported that mining companies paid tax of about 42.2 per cent.
The paper’s authors, Richard Denniss and David Richardson, said the rate was not high by historical standards in Australia, and would not put mining investment at risk.
“Despite the protestations of mining companies about the impact of the proposed minerals resource rent tax, big mining companies were willing to invest in Australia in the 1970s when the effective tax paid on corporate profits by a shareholder in the top tax bracket was 81 per cent,” the paper said.