Australia’s world-class mining sector has doubled its contribution to funding for roads, schools, hospitals, police and other essential services on which Australians depend since the previous year through a massive increase in company tax and royalty payments in 2016 - 2017.
Estimates of royalties and company tax accrued in 2016-17 by Deloitte Access Economics reveals that Australian mining companies paid AUS$12.1 billion in company tax in 2016-17 – almost four times as much as 2015 - 2016, the highest since the mining investment boom in 2011-12 and more than the Federal Government spent on the Pharmaceutical Benefits Scheme.
This means that mining companies are estimated to have paid one in every AUS$5 of Australia’s company tax take.
Mining companies also paid AUS$11.2 billion in royalties in 2016 - 2017, providing total revenue to Commonwealth and State Governments of AUS$23.3 billion in company tax and royalties in 2016 - 2017 – double the previous year.
In total, mining companies paid AUS$203.6 billion in company tax and royalties in the 12 years between 2005 - 2006 and 2016 - 2017. The report uses a combination of official figures (such as data from the Australian Taxation Office and various state treasuries) and Deloitte Access Economics’ own estimates.
The increase in company tax payments is driven by stronger commodity prices and hence profitability in 2016 - 2017. Company tax is a profits tax which is responsive to rises and falls in commodity prices. After a fall in profits and commodity prices between 2012 and 2015, company tax declined, but is now on the increase in parallel with commodity prices.
The increase in royalties follows a significant investment in new production over recent years, which is delivering a strong dividend to the states from royalties which are based on production.
The increase follows a previous study from Deloitte Access Economics released in January this year which showed mining companies paid an effective tax rate of 51% in 2015 - 2016 in company tax and royalties – the second highest tax ratio recorded since the survey began nine years ago. Increased payments from mining companies in company tax and royalties provide governments with increased revenue to fund infrastructure and essential public services.
For example, the AUS$23.3 billion paid by mining companies in company tax and royalties in 2016 - 2017 is almost as much as the Federal Government spent on schools and road and rail infrastructure in the same period.
These figures also show that Australia’s minerals sector pays its fair share of company tax and royalties.
A successful Australian mining sector means a stronger Australian economy.
Read the article online at: https://www.globalminingreview.com/finance-business/13042018/a-successful-australian-mining-sector-means-a-stronger-australian-economy/