Australia’s controversial mineral resources rent tax (MRRT) was passed into law by the upper house of the nation’s Parliament (the Senate) March 19. The law, which imposes a 30% tax on Australia’s iron ore and coal mine profits, will become effective July 1, 2012. The law passed the House of Representatives in November 2011.
Proposals for new taxes on Australia’s mining industry have been a source of controversy since a proposal for a Resource Super Profits Tax cost then Prime Minister Kevin Rudd his job in June 2010. Julia Gillard replaced Rudd as prime minister and negotiated the MRRT with Australia’s three largest international miners—BHP Billiton, Rio Tinto and Xstrata. However, the tax has drawn ongoing criticism from other sectors of the mining industry.
The Association of Mining and Exploration Companies (AMEC) on March 19 posted an article on its website headlined “Sad day for national interest.” The MRRT is ill-conceived, poorly designed, unfair and discriminatory AMEC CEO Simon Bennison said. “AMEC is astounded that a tax favoring large multinational businesses and discriminating against smaller businesses can be passed through Parliament. The tax is simply unfair to smaller emerging miners and is so complex that the administrative and compliance burden on industry and government will be extreme.”
News reports suggested that MRRT may face court challenges and also that the government’s forecast of A$10.6 billion in revenues from the tax during its first three years would not actually be realized.