The Minerals Council of Australia (MCA) has defended resource companies after the Commissioner of Taxation referenced the resources industry in relation to tax avoiders being like Olympic drug cheats.
In an interview with the Australian Financial Review, Commissioner of Taxation, Chris Jordan, compared resource companies not paying tax to “drug cheats at the Olympics”.
“There’s no point settling with these companies and then having to do it all over again,” Mr Jordan said.
The MCA said Mr Jordan’s reference to resource groups and Olympic drug cheats is disappointing and incorrect in relation to the minerals industry.
The MCA said the minerals industry has been paying tax consistently for years and record amounts over the last decade.
The latest EY report commissioned by the MCA highlighted the record company tax and royalty payments made by the minerals industry showing in the last decade the mining industry contributed $254 billion in company tax and royalties.
The Australian Taxation Office (ATO) Corporate Tax Transparency Report, released in December 2021, showed that the minerals industry contributed more than 40 per cent of all the company tax reported by the 2,370 large entities.
BHP and Rio Tinto paid more than $10 billion in company tax in the 2019-20 tax year.
However, Rio Tinto was recently ordered by the ATO to pay $613 million in unpaid and disputed tax for the 12 years between 2010 and 2021.
In the Australian Financial Review, Mr Jordan said recent settlements, such as the Chevron case in 2017, have started to see benefits.
“Resources companies have started paying tax,” Mr Jordan said.
“We collectively eliminated more than $30 billion of their losses applying the Chevron decision, so they are paying tax a lot earlier.”
However, the MCA said the matters settled by Rio Tinto and BHP relate primarily to transfer pricing, which can be complex because they don’t just involve the ATO, but also foreign revenue authorities that have their own view as to the appropriate outcome.
The MCA said the minerals industry pays the highest wages, generates substantial economic activity, pays the most company tax and delivers the most export revenue.
Despite this, Mr Jordan said to the Australian Financial Review, “The tax office will be doing their job. We will be providing them with all the resources they need.
“We want to make sure that people who have been avoiding paying their fair share of tax do the right thing and that the law is actually imposed.”
