PNG to profit from ‘super profits tax’: Chamber
By YEHIURA HRIEWAZI in BRISBANE http://www.thenational.com.pg/?q=node/9269
THE PNG Chamber of Mines and Petroleum believes that the Australian government’s resources “super profits tax” (RSPT) will drive some companies to invest in PNG.
Already, Queensland’s richest man and iron ore miner Clive Palmer has said he would look at investment in more hospitable places like PNG where he has interests in petroleum-energy exploration licences.
Two other big miners, Xstrata and BHP, who have interests in PNG, are up in arms over the 40% tax that will become effective on July 1.
PNG used to have a similar tax called “super profits tax”, which was removed in 2003 among major incentives announced by the Somare-government which had an immediate positive effect in attracting new players and increased grassroots exploration activities.
The RSPT in Australia was warmly applauded by PNG Chamber of Mines and Petroleum’s executive director Greg Anderson.
“I’m delighted the Australian government is driving companies offshore, because we are going to pick some of them up,” Anderson told The Australian on Tuesday.
“It loads the dice in our favour.”
Anderson said the chamber had lobbied the PNG government for five years to remove a super-profits tax there – a form of resource rental tax that was introduced while Australian economist Ross Garnaut was the first assistant secretary at the PNG Finance Department 35 years ago, now abolished.
Resource companies mining in PNG now pay 30% company tax and moderate royalties, although an additional profits tax was reintroduced 18 months ago for designated gas projects.
Anderson, formerly a geologist, said PNG’s additional profits tax on mining was paid only by Bougainville Copper, formerly the world’s largest copper mine, for which the tax was chiefly designed.
“It was a complex tax, which looked very bad on paper because no one could understand it overseas.”
“So the government at last got rid of it, simplified tax and made it internationally competitive -- also at a time of rising commodity prices.
“The industry was able to deliver growth, and is still doing so today,” Anderson told The Australian.
He said the PNG additional profits tax was “nowhere near as onerous” as the Rudd government’s new super-profits tax, with a much lower threshold than the RSPT.