Research on the mining tax has reinforced the need for the inclusion of safeguards for smaller miners to make the tax fair, BDO says,
The accounting firm states that updated modelling confirms that larger mining companies will not pay the Mineral Resources Rent Tax once it is enacted due to their offsets, which puts junior miners at a competitive disadvantage.
Its most recent report stated this tax free period for large miners may even be longer than the earlier modelling showed.
Fortescue Metals’ Andrew Forrest last week stated that this period may be up to five years.
He went on to say that larger miners such as Fortescue will actually be paying less tax than many of its junior counterparts, adding that "we cannot have an unfair tax.
"Being ill conceived, poorly negotiated by Government and finalised in a shroud of secrecy and exclusiveness with the world’s biggest mining companies, this tax is unfair and a penalty on smaller mining companies."
BDO corporate tax director John Murray added that this "modelling proves the MRRT hits smaller miners and leaves alone the big established miners".
Murray called for the addition of protections such as timing and rate parity.
"In its own words the Government wants a fairer, simpler tax system. Time and rate safeguards will provide the MRRT with the fairness the Government says it wants."
BDO also proposed an alternative to the tax, where companies would pay installments and on receipt of the MRRT returns could be applied to assessing the current year of tax.
However, Murray said alternative aside, the focus should be on fairness, rather than modelling assumptions.
"There is a very short time to address these important issues and to achieve the goal set by the Government."