Alan’s 8.10 editorial 3.7.17
Tax PRRT July 3 2017
Well, the question of whether multinational gas miners pay enough tax in Australia been raised in the past
According to Tax Office figures just 5% (8 out of 149 large resource projects) paid Petroleum Resource Rent Tax to the Federal Government in 2014-15
Yet gas miners in Australia generated revenues of $25 billion over the same period
So how did they avoid Petroleum Resource Rent Tax?
Well, Petroleum Resource Rent Tax is not a flat tax based on revenue
Miners are able to write off their exploration and other capital costs against their revenue
And according to Tax Office figures, as at 2014-15, the total amount the industry had written off, had reached a massive $187 billion
Since then the industry has written off a further $50 billion in 2015-16
In other words, gas miners have put themselves in a position where they mightn’t pay Petroleum Resource Rent Tax for years if at all
Scott Morrison initiated an inquiry into the Petroleum Resource Rent Tax last November
That report concluded there was no need for major changes
And a Treasury consultation paper released on Friday says Treasury has no intention of “revisting the question of whether the Petroleum Resource Rent Tax should be replaced with alternative forms of taxation”
To be fair, miners already pay plenty of tax by way of royalties to State Governments
But is there any point in a Petroleum Resource Rent Tax if no-one pays it?