Wednesday 31st October 2012
|Text too small?|
The government is moving to tweak tax and royalty regimes in a bid to increase the revenue it collects from the resources sector having signalled plans to facilitate mining.
The government is seeking submissions by Dec. 7 on a review of royalties paid by miners, excluding oil and gas companies, and a separate tax paper that excludes oil and gas and coal. New mineral mines will have to pay higher royalties and tax concessions for miners are being removed.
The government says the current tax regime for miners is concessionary and should be comparable to other industries so there is no bias in investment decisions.
The tax moves come after the government outlined a review of mining legislation in March as it seeks to encourage mining of a wider range of minerals in new areas to drive economic growth.
The Crown wants to receive a "fair financial return" from tax and royalties as minerals are mined, according to the documents released on Wednesday.
The tax review suggests removing immediate tax deductions, or in some cases tax deductions in advance, for expenditure that would normally be capitalised and depreciated over the useful life of the asset.
The royalties review recommends higher royalty rates for large and highly profitable mines. New rates only apply to new permits.
New Zealanders know that the royalties and taxes from mining companies pay for hospitals, school and roads, Energy and Resources Minister Phil Heatley says.
"There is real potential for that contribution to grow," he said.
The Reviewing the Royalties Regime for Minerals paper focuses on the royalty rates applied to coal, gold, silver, platinum group elements, ironsands, phosphates and seafloor massive sulphides (SMS).
A hybrid royalty of the higher of a 2 percent ad-valorem (AVR) or a 10 percent accounting profit (APR) royalty will apply to new coal, golf, silver, platinum, ironsands, phosphates and SMS permits.
Coal miners can make an annual accounting profit of $5 million before the 10 percent APR royalty would apply and for gold the figure is $2 million.
An existing threshold of $200,000 of annual net sales is retained before permit holders are liable to pay a royalty.
New underground coal gasification projects pay the higher of a 1 percent AVR or a 10 percent APR.
Currently gold, silver and platinum miners pay an AVR royalty of between 1 percent and 2 percent, depending on the size and coal miners pay a unit based royalty of $1.40 per tonne for hard and semi-hard coking coal and 80 cents a tonne for thermal and semi-soft coking coal.
No comments yet
NZ dollar falls on news RBNZ is looking at "unconventional" policy
Wrightson capital return gets shareholder approval
Morrison & Co eyes asset sales from first PIP Fund
Improved transmission pricing may save $2.7 bln - Electricity Authority
Precision Foundry receivers say no money for unsecured creditors
23rd July 2019 Morning Report
NZ dollar tad weaker, ECB, Federal Reserve in focus
MARKET CLOSE: NZ shares outperform Asia as exporters gain; Sky leads market higher
Significant shortfall for subbies in Ebert receivership
Transpower sees no risk to credit metrics from incentive change