The Mineral Resources Rent Tax
Starting from 1 July 2012, our mining sector will be the focus of a new tax – the Mineral Resource Rent Tax (MRRT). This tax is important to us here in Western Australia as mining is one of the staples of our economy. This tax replaced the proposed Resource Super Profit Tax (RSPT) proposed by former Prime Minister Kevin Rudd.
This tax, which passed through the senate on 19 March 2012, will be applied to all new and existing iron ore and coal projects in Australia. The tax will be applied to all assessable profits of those projects at a rate of up to 30% for companies who make $75 million dollars or more in profit. It is estimated around 320 companies will be potentially affected by this tax.
There are allowances in the MRRT. These allowances will allow companies to deduct their state royalties for MRRT purposes, and they also allow MRRT payments to be deductible by companies for income tax purposes.
While this tax may not affect most of our customers, it does affect Western Australia as a whole. We certainly expect costs and prices to rise as a direct result of the MRRT.
Want to know how this tax will affect your profits and cash flow? Please call our office on 08 6272 6888 and ask how we can assist you.