Australia | Jul 02 2010
By Rudi Filapek-Vandyck
The post-Rudd government has finalised its negotiations with miners and energy companies and a new tax regime has been born since. Start saying “Minerals Resource Rent Tax (MRRT)” every morning in the mirror because that's the new term we will all hear a lot from now on.
Key characteristic of the new MRRT is that it only applies to iron ore and coal, which reduces the number of affected companies from 2500 to around 320, according to a joint press statement released on Friday morning.
The current Petroleum Resource Rent Tax (PRRT) regime will be extended to all Australian onshore and offshore oil and gas projects, including the North West Shelf.
Starting date of the tax changes is 1 July 2012.
On the government's estimates, the changes will “cost” (less revenues than earlier estimated) some $1.5bn and this has led to other changes in the previous suggestions.
Change number one is that small companies can no longer look forward to a cut in tax rate to 28%, they'll have to deal with 29% instead. Similarly, the overall tax for larger companies in Australia will fall to 29% from 30% from 2012-13 onwards, but there will be no second reduction to 28%.
Also, the previously suggested “resource exploration rebate” has now been shelved. Not that big mining companies cared about this government security anyway.
The government maintains the changes will not impact on its intention of bringing the budget back to surplus by 2013.
