This is an update to my last 2 posts that were not quite right. I've crunched some numbers and, treating the Resource Super Profits Tax (RSPT) as a huge new deductible expense (effectively what it is), the (rough) rates of total tax I came up with are as follows:
35% = current total tax and royalties, assuming a royalty of 7% that is deductible for Income tax purposes and an income tax rate of 30%.
42.4% = total tax and royalties under the proposed new system with RSPT on 50% of a mining company's net profit.
51% = total tax and royalties under the proposed new system with RSPT on 80% of a mining company's net profit.
These calculations don't allow for mine development costs that reduce the RSPT but they do indicate a substantially increased tax burden on mining companies.
BRM Price at posting:
$3.25 Sentiment: Hold Disclosure: Held
