By ERWIN CHLANDA
It’s going to net the Territory only $10m but it seems to be the kind of measure that could have delivered to Julia Gillard the motza in revenue she isn’t getting from the mining industry.
And Treasurer Dave Tollner says it signals to the Grants Commission what it constantly is looking for, namely that the Territory is fair dinkum about raising taxes: As it is, 78% of our $5.7 billion Budget comes from Canberra, as GST and grants.
Two changes announced by Mr Tollner in this week’s NT Budget will make it harder for mining companies to shift profits overseas and minimise their Territory royalties obligations.
Firstly, under the Mineral Royalty Act, once the net value of a mine’s production is over a $50,000, it must pay royalties.
They are calculated on the operating revenue less allowable project costs, losses carried forward, the cost of capital and of exploration.
However, if that mining company sells its ore, at a very generous discount, to a company it owns overseas, which then onsells it to the end user for a very good profit, the NT misses out. No longer: The “capping transfer pricing” has now been set at 5.5%. That means the Territory will charge its royalties on the end sale price less no more than 5.5%.
Secondly, another measure will address the risk of accounting strategies that shift to the Territory expenses that were incurred by related entities either elsewhere in Australia or overseas.
The Act will be amended to limit the deduction of head office costs, management fees and labour costs to costs incurred in the Territory only.
The amendments are targeted at encouraging and rewarding those mining companies that genuinely maintain and operate a bulk of their operations in the Territory, says Mr Tollner.
Chief Minister Adam Giles told a Chamber of Commerce lunch yesterday that the government was working “behind the scenes” on getting mining and processing projects going in The Centre.
PHOTO: A Crossland uranium exploration crew in Central Australia.
Tollner's Budget measure to stop mining royalties minimisation
By ERWIN CHLANDA