Aussie mining tax deal imminent

1st Jul 2010 09:35

Reports in the Australian press indicate that the Australian government is close to striking a deal with mining companies over the proposed introduction of a resources super profits tax.BHP Billiton, Xstrata and Rio Tinto have reportedly agreed a deal with the government that is thought to be a watered down version of the 40% tax rate favoured by former prime minister Kevin Rudd, who was ousted as leader last week.The trio have agreed to a new trigger point for the imposition of the levy, which would see it set at the 10-year Commonwealth bond yield plus 7%, effectively doubling the rate at which the tax kicks in from its current rate of 6% to 12%.In return, the government has given ground on the idea of applying the tax retrospectively to existing projects. It is unclear whether the government has also compromised on the headline rate of 40%, though unnamed sources suggested the government is prepared to be flexible on this issue. Deputy Prime minister Wayne Swan declined to verify the press reports, commenting only that the talks have "got some way to go as yet".