The paper titled “Mining taxes and Subsidies: official evidence”, by Sinclair Davidson, evaluates official statistics on Australian mining taxation and sizes up claims that mining tax rates are lower than those of other industries.
In the paper, it quotes Treasury Secretary Martin Parkinson, who told the Australia–Israel Chamber of Commerce in 2012 that “mining companies account for about a fifth of gross operating surplus, yet only around a tenth of company tax receipts”, and Treasurer Wayne Swan, who told Australian Business Economists that “mining companies currently account for about 30% of corporate gross operating profits, but only around 15% of corporate tax receipts”
The MCA paper cites the Australian Taxation Office, which reported that the mining industry paid $6.8 billion in net tax in 2009-10, down from $13.4 billion in 2008-09 due to a decline in commodity prices.
The industry had a taxable income of $23.8 billion and an average effective tax rate of 28.5% in 2009-10.
The ATO also found that mining was the second largest contributor to corporate income tax revenue (13.5%) after financial and insurance services (31.6%), which paid $15.9 billion out of taxable income of $72.3 billion – an average effective tax rate of 21.8%.
“The argument that mining pays a low percentage of its income in taxation is simply not true,” the MCA paper said.
“The argument that mining pays a low proportion of total corporate tax is simply not true.
“Manufacturing and mining pay proportionately more in net tax than their taxable income share of the economy.”