The Northern Territory Government will close two tax loopholes, which will generate an extra $10.6 million out of mining cmpanies.
The first new measure in this year’s savings-based Budget limits the total mining companies can claim as a transfer price for a mineral set at 5.5 per cent of its value.
Mineral production was set to be worth $2.7 billion in 2013-14 but mining royalties are predicted to raise $113.3 million, for a recovery rate of 4.2 per cent, ntnews.com.au reported.
A local miner can ‘sell’ the mineral ore to a related body when it is part of a corporate group. They must produce a ‘transfer price’ to calculate their profits.
The less profit a company makes, the less it has to pay the Government for rights to mine the public-owned minerals because NT has a profit-based royalty structure.
Treasurer Dave Tollner said the measure is an effort to make transfer prices more visible.
The second step would place a limit on the total corporations can claim on tax for administrative costs for an overseas head office.
Tollner said companies had been claiming expenses as the state’s costs.
“We put a cap on that. It’s an incentive to move the head offices to the NT,” he said.
The revenue generated would fund the Department of Mines and Energy, with an extra $9.1 million.
Mining is NT’s largest industry, worth $3.7 billion, or 19.8 per cent of gross domestic product in 2011-12.