MRRT Draft Released: Minerals Resource Rent Tax Faces Industry Feedback
Posted: 09/22/2011 12:00:00 AM EDT | 0
Wayne Swan Comments on 2nd Draft of MRRT released this week
The federal government released the second exposure draft legislation for the minerals resource rent tax (MRRT) this week. The draft legislation establishes the framework for the operation of the MRRT and takes into account comments received during the primary consultation process.
Federal Treasurer Wayne Swan commented that the Treasury would continue to work closely with the resources tax implementation group (RTIG) to refine the legislation prior to introduction to Parliament.
He also noted that the revenue from the MRRT would support all Australian businesses, through a cut to the corporate tax rate and substantial tax relief for the nation's small businesses. This would also include benefits to infrastructure and investment into critical captial and major works across the nation.
The revenue from MRRT will help “to fund critical investment in roads, bridges and other infrastructure, relieving capacity constraints particularly in our great mining regions,” Swan said.
Mr Swan believes that there has been a shift in the perception towards MRRT with more people appreciating that the MRRT is a critical reform in relation to the mining boom.
Uncertainty around Nature of MRRT
However, many in industry were not as positive in their outlook as the treasurer, with the Association of Mining and Exploration Companies (Amec) asserting their belief that the “serious discriminatory nature” of the proposed MRRT has still not been addressed.
The MRRT would levy a 30% tax on the resources profits of coal and iron-ore companies from July 1, 2012.
Amec and its members will thus continue to oppose this additional tax. And Simon Bennison, CEO of Amec, further shared that they will “continue to make appropriate representations to have it rescinded in its entirety.”
What's Next for the MRRT?
There is a general consensus that the second draft of the Mineral Resource Rent Tax (MRRT) legislation is considerably more robust and provides a clearer picture for miners on implications for M&A and administrative aspects of the tax.
However, despite this improvement - there remains contention around subtleties and principles within the tax and continued pushback from industry.
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