In May 2010, the Australian federal government announced its plan to impose the Resources Super Profits Tax (RSPT). In 2012 this tax was replaced by a Mineral Resource Rent Tax (MRRT). The imposition of the new tax on mining companies would result in a significant increase in the effective tax rate on mining companies and would generate large revenue for the government that would be used for infrastructure development.
Advanced Corporate Accounting
1. Briefly review essential features of the initially proposed Resources Super Profits Tax and its replacement Mineral Resources Rent Tax (MRRT). What are the basic differences between the two?
2. Critically examine the stated reasons why the federal government proposed the Super Profits Tax on the mining sector.
3. Discuss the mixed reactions of various stakeholders (eg. miners, workers, the finance sector, unions, the federal government, the opposition party etc.) to the RSPT and MRRT.
4. How did some mining companies dodge the MRRT and virtually paid no tax? What accounting/regulatory loopholes they had exploited in doing so?
5. What role do you see accounting and accounting standards could play in the debate?