After almost a year of the Gillard government’s mining tax being in play, Rio Tinto has made its first payment.
But the mining giant remains in ''very high-level'' discussions with the Australian Tax Office over whether it has been correctly calculating its obligations during the first nine months of the controversial tax, the SMH reports.
BHP Billiton and Rio officials have told a Senate inquiry that the companies had paid mining tax for the March quarter but market disclosure rules temporarily prevent the miners from revealing the exact amounts paid.
The March quarter payments were based on the miner’s Pilbara iron ore businesses, where prices and profit margins held up better than the coal sector.
The ATO has launched an investigation into the poor revenue flows from the mining tax, a move that Rio Tinto tax expert Ross Lyons welcomes, saying the company is keen to clarify whether it is correctly interpreting the complex tax structure.
''The ATO have contacted us, wanting to understand some of the key matters that determine the MRRT [minerals resource rent tax] outcome – the methodologies, the starting base, the upstream costs. It has been a very high-level inquiry, we have provided some information and are having ongoing discussions with them,'' he said.
The mining tax’s shortfall has only exacerbated the Federal Government’s $12 billion budget hole announced on Monday.
Lower commodity prices, infrastructure investments, and increasing state royalty payments which are deducted from miners' tax has resulted in companies like Fortescue Metals and Xstrata avoiding payments.
As the government scrounges for budget savings Minerals Council of Australia boss, Mitch Hooke said he feared the mining industry could now be a target, especially when it comes to existing tax concessions for diesel consumption and exploration.
Coal exporter Xstrata used the Senate inquiry to highlight the poor profit margins being recorded across much of the coal sector.
''We would estimate that somewhere in the region of 36 per cent of Australia's thermal coal mines and almost 45 per cent of coking coal mines are, in fact, in a loss-making position at the moment in Australia,'' Xstrata government relations manager Cassandra McCarthy said.