New Resources Tax in AUstralia ( MRRT) and it's effects on Australian Essay

New Resources Tax in AUstralia ( MRRT) and it's effects on Australian mining companies - Essay Example The Gillard Government’s proposed resource tax gained high approval from the International Monetary Fund, quoting it as a â€Å"step in the right direction.† Moreover, the MRRT would achieve the nation’s trust for consumption-based taxes and abolish ineffective taxation (Landers 2010). Because the MRRT is liable only to mining companies of iron ore, coal, oil and gas, there will be a reduction of the figure of affected companies from the previous 2,500 taxpayers to approximately 320 (Cherrington 2010). Taxpayers with annual income of no more than $A50 million will be exempted from the MRRT (Minerals Resource Rent Tax Regime n.d.) -The proposed MRRT promises an optimistic stride for mining investments in Australia. It offers a better guarantee for up-and-coming mining ventures, particularly those in the non-production of iron ore, coal, oil and gas. -For companies in mining ventures, the determination of taxable resource and revenues will be based solely on the nearest point to extraction as possible. This change would not deter the companies from their capital cost recovery and internal return rate. -The key adjustments from RSPT to MRRT in tax rates, particularly the 40% tax reduced to 22.5% rate and the resulting beneficial impacts on the projected efficient tax rates is forecasted to boost global competitiveness (Minerals Resource Rent Tax replaces RSPT 2010). The three pioneer mining companies in Australia: BHP, Rio Tinto and Xstrata equally agreed on a non-permission of the Australian tax to implement a target that could impact their multi-national operations. Their joint apprehensions over fluctuation on international shares and financial markets, whereupon loans are made to fund their projects, strengthened their vigilance on impending tax hikes by the government (Head 2010). The government negotiated exclusively with the