Reading this article it sounds like linc will benefit from the henry tax review.
HENRY TAX REVIEW: Miners slugged with 40% tax on profits to fund Henry Review reform Sunday, 02 May 2010 15:10 Patrick Stafford Related Items Henry Tax Review The resources sector will be hit with a 40% tax on super profits in order to fund the Governments changes to corporate taxes and superannuation reform, with treasurer Wayne Swan saying the initiatives depend entirely on the new mining tax.
However, the Government has been quick to say the new tax will not hinder the industrys growth, with benefits to be given to companies undertaking exploration ventures.
The RSPT (Resource Super Profits Tax) will charge companies at a rate of 40% from July 1, 2012 on profits made from the exploitation of Australias non-renewable resources, according to the Government.
Currently, the Government says, resource charges are failing to collect an appropriate return for the community from the mining boom. Charging the previous Howard administration with failing at producing a long-lasting result from resources revenues, Swan says the Government must have something to show for the second stage of the boom.
The RSPT will provide a more appropriate return to the Australian community from the exploitation of its non-renewable resources compared with the current charging arrangements.
The RSPT will replace the crude oil excise, and operate in tandem with current State and Territory royalty regimes. Additionally, projects within scope of the Petroleum Resources Rent Tax will have the option of either opting into the RSPT or staying with the PRRT.
Additionally, under the RSPT a refundable credit for royalties paid to the State and Territory Governments will be available, with this credit to eliminate investment distortions associated with state royalty systems.
RSPT liabilities will also be deductible, with RSPT refunds being assessable for income tax purposes, with the Government to effectively make a contribution of 40% to the costs of the project outlaid by the entity.
However, the Government will attempt to ease the pain of the tax with the introduction of a new resource exploration rebate. This will see the Government provide a refundable tax offset at the prevailing company tax rate for exploration expenditure.
All mining companies will be able to access the new Resources Exploration Rebate, with about 4,300 firms estimated to benefit from the new initiative which is set to apply from July 1, 2011.
The Resource Exploration Rebate is a simpler and more effective means of fulfilling the Governments election commitment to support the development of Australias resource sector than a traditional flow-through shares scheme.
Expenditure incurred in exploring or prospecting for minerals, petroleum or quarry minerals can be immediately deducted, while for companies with little or no taxable income, the existing deductions add to tax losses that are carried forward and offset against future income.
Additionally, the Government is set to introduce a new infrastructure fund that it says will help resource-rich states develop mining projects, thereby benefiting participating entities.
The new fund, which will begin from 2012-13, will be used to increase development opportunities in resource-rich areas and will receive $700 million from the Government each year.
This infrastructure fund will be distributed to the States in a manner which recognises that resources-rich states large associated infrastructure demands, the Government has said.
Resources-rich states will receive relatively more funding which can be used to support investment in infrastructure, including that necessary for the ongoing development of the resource industry
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$1.55 Sentiment: Buy Disclosure: Held
