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PERTH (miningweekly.com) – Australia’s resources sector paid some A$12.1-billion in company tax in 2016/17, nearly four times what was paid in 2015/16, a new report by advisory firm Deloitte Access Economics has revealed.
The 2016/17 contribution was the highest since the mining investment boom in 2011/12, the report, which was commissioned by the Minerals Council of Australia (MCA), reads. This means that mining companies are estimated to have paid one in every five dollars of Australia’s company tax take.
Australia’s mining companies also paid A$11.2-billion in royalties in 2016/17, providing total revenue to commonwealth and state governments of A$23.3-billion in company tax and royalties in 2016/17, double that of the previous year.
Western Australian miners provided the lion’s share of royalty payments, accounting for A$5.25-billion in payments, with Queensland and New South Wales companies following at A$3.9-billion and A$1.5-billion, respectively.
In total, mining companies paid A$203.6-billion in company tax and royalties in the 12 years between 2005/6 and 2016/17.
Deloitte noted that the increase in company tax payments was driven by stronger commodity prices and profitability in 2016/17. 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 by Deloitte Access Economics, released in January, which showed mining companies paid an effective tax rate of 51% in 2015/16 in company tax and royalties, the second-highest tax ratio recorded since the survey began nine years ago.
The MCA said on Wednesday that these figures also showed that Australia’s minerals sector paid its fair share of company tax and royalties.
“A successful Australian mining sector means a stronger Australian economy,” the industry body said.