tax grab, page-5

It is called a " Super profits tax" but if you had a gross profit of $1 the Govt would still take 40C. Many do not understand the new tax which is essentially a rent tax is only applicable to a resource pulled out of Australian soil. If company extracts resource sells for $100 million cost of mining $40 million, leaves a gross profit of $60million. This is taxed at 40% hence $24 million to Govt $36 million to company. Company can then pays not mining related expenses from remaining $36million ie directors/ receptionist/ office/ lawyers/ accountants /phones power say $6 million. This leaves $ 30million net profit which will be taxed at 28% ie further $8.4 million to Govt with 21.6 million to company. So in summary prior to change tax payable would have been $16.2 million (30% of 54 million) but will now rise to $32.2 million . With companies after tax profit down from $37.8 million to $21.6 million. Above is simplification to give overview of proposed changes, which Greens will allow through senate.