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High commodity prices led to record tax - ATO

3rd November 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Data released by the Australian Taxation Office (ATO) on Thursday showed that large corporations in Australia paid $68-billion in income tax in 2020/21, the highest since reporting started.

High commodity prices were the key drivers of the increase in corporate tax payments, the ATO said, noting that Australia had one of the highest levels of tax compliance of large business in the world with 93% of tax paid voluntarily, and 96% after the ATO’s compliance activities.

The ATO report shows that the mining industry paid more than 40% of the tax paid in 2020/21.

Australia’s three largest company taxpayers are mining companies and they paid A$22.3-billion, or 33%, of the tax paid by 2 468 large entities. In addition to the record amounts of company tax paid in 2020/21, the mining industry paid A$16.7-billion of royalties to state and territory governments.

“Company tax payments from the minerals industry help fund better services for the community, including mental health, aged care and woman’s programmes. They also pay for schools, hospitals and other infrastructure,” Minerals Council of Australia CEO Tania Constable said.

“The mining sector contribution was the key driver to the improvement in the federal budget outcome. It has underpinned the nation’s prosperity and can be relied upon to generate large fiscal returns to the economy, having contributed A$142.6-billion in company tax and A$112-billion in royalties over the last decade.

“A strong mining industry is central to Australia’s ability to grow and generate jobs, opportunities and government services to benefit all Australians,” Constable said.

She noted that the ATO had pointed out that some businesses did not pay tax in a particular year because of commercial reasons including not making a profit, recouping prior year losses and unexpected shutdowns owing to factors such as the Covid-19 pandemic.

“While commodity prices are cyclical, Australia can continue to benefit from further growth in its mining industry if we get the policy settings right. Demand for commodities such as lithium, copper, nickel and rare earth elements will climb as the world drives to lower emissions.

“Australia can maximise our share of the investment required to deliver the critical commodities for the world, provided we have globally competitive tax rates and work place flexibility.

“We do not want to put at risk our opportunity to generate future jobs and prosperity through changes to taxation or enterprise employment arrangements that make the country less competitive,” said Constable.

Edited by Creamer Media Reporter

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