The Chamber of Minerals and Energy has warned WA miners face the prospect of a "double-tax whammy" unless the federal government guarantees future rises in state royalties are credited under the Minerals Resource Rent Tax.
The Chamber of Minerals and Energy has warned WA miners face the prospect of a "double-tax whammy" unless the federal government guarantees future rises in state royalties are credited under the Minerals Resource Rent Tax.
The CME has made a submission to the Policy Transition Group on the proposed MRRT.
CME chief executive Reg Howard-Smith warned that a resource rent tax on top of state royalties could make Australia the most highly-taxed mining province in the world.
He said failing to credit royalties would seriously undermine the future revenue base of the state government.
Mr Howard-Smith said the CME supports a state-based royalties revenue scheme.
"The state is responsible for much of the administration and regulation of our industry - and its right to draw a royalty on resources belonging to the people of Western Australia is without question," Mr Howard-Smith said.
"The existing regime ensures all money derived from WA projects is actually spent in WA."
As well the issue of royalties, CME raised a number of issues in its submission including at what point the tax is applied, the valuation of resource at the mine gate and the operation and rate of the MRRT threshold.
Mr Howard-Smith said the CME remains opposed MRRT and the expanded Petroleum Resources Rent Tax until the full impact of the proposed changes is fully understood.
See statement from CME below:
WA miners face the prospect of a double-tax whammy, unless the federal government guarantees future rises in state royalties are credited under the proposed Minerals Resource Rent Tax (MRRT).
In its submission to the secretariat of the Policy Transition Group, the Chamber of Minerals and Energy of Western Australia (CME) said the federal government must ensure the MRRT did not further damage the international competitiveness of the sector, responsible for driving the national economy and supporting half a million jobs in WA.
"A scenario where the federal resource rent tax comes on top of state royalties, without appropriate crediting, is unacceptable - it has the potential to make Australia the most highly-taxed mining province in the world," CME Chief Executive Reg Howard-Smith said.
CME - representing 90 per cent of minerals and energy production in WA - strongly supports retention of the state royalty regime.
The chamber opposes the introduction of the MRRT/expanded Petroleum Resource Rent Tax (PRRT), until the full impact of the proposed changes is fully understood.
Mr Howard-Smith said failure to credit royalties would seriously undermine the future revenue base of the WA Government - in the coming year, it's estimated the state will receive $3.2 billion in royalty payments.
"The state is responsible for much of the administration and regulation of our industry - and its right to draw a royalty on resources belonging to the people of Western Australia is without question," Mr Howard-Smith said.
"The existing regime ensures all money derived from WA projects is actually spent in WA," Mr Howard-Smith said.
"Policies such as Royalties for Regions are seeing hundreds of millions of dollars pumped back into the regional communities, from where these minerals are extracted."
Crediting of royalties is one of several issues CME has raised in its submission. Other issues include, but are not limited to:
- Taxing point - the MRRT must apply to the primary resource value, and as close to the mine gate as possible;
- Valuation of resource at mine gate - this must recognise full commercial rate of return for all downstream activities; and
- The operation and rate of the MRRT threshold - the threshold should be tax-free, to provide adequate shelter to emerging producers and low primary value resource operations.
Mr Howard-Smith said members supported genuine taxation reform, aimed at streamlining existing regimes and boosting the sector's international competiveness.