Australia’s federal Treasury Department has admitted that Labor’s controversial Minerals Resource Rent Tax (MRRT) is unlikely to generate predicted annual estimates of A$2bn ($2.08bn).
According to the department, the poor performance of the mining tax to date implies that revenue for 2012-13 will be less than the revenue estimated in October 2012.
The MRRT generated just A$126m in the first six months of implementation.
Treasurer Wayne Swan blamed the drop in coal and iron ore prices and a strong Australian dollar for the low tax revenues.
The Treasury and the Australian Taxation Office (ATO) are currently investigating the reasons behind the failure of MRRT and are set to appear before the Senate’s economics panel.
ATO will scrutinise the accuracy of the approaches used by mining companies to evaluate their iron ore and coal assets in order to create the initial base to pay the mining tax and determine an allowance to the lower the tax, reports the Australian.
The MRRT, which was introduced on 1 July 2012, taxes on 30% of the ‘super profits’ earned by iron ore and coal mining companies.
Large mining companies oppose the tax, stating that it affects competitiveness and future investment in the sector.
Image: The Australian Taxation Office will scrutinise the accuracy of the approaches used by mining companies to evaluate their iron ore and coal assets. Photo courtesy of dan/FreeDigitalPhotos.net.