Johannesburg - BHP Billiton [JSE:BIL]
, the world's largest resources group, on Friday said the the Australian government's proposed super tax on the resources sector has the unintended effect of dramatically slowing investment in Australia and putting the future prosperity and employment prospects of all Australians at risk.
Resources groups are meeting with the Australian government to get a better idea of how the 40% tax on profits generated by resource companies would be imposed and to try and desuede the government from pushing through the tax without further thought.
The tax is seen as being imposed on the "super profits" of mining giants such as BHP Billiton and Rio Tinto that reap the benefits of an Asia-driven commodities boom.
BHP Billiton, which is also listed in South Africa, said the imposition of this new tax would result in an increase in the total effective tax rate on the group's profits earned from its Australian operations from around 43% currently to around 57% from 2013.
Reporting back on its meeting with the Resource Tax Consultation Panel advising the Australian government, BHP Billiton said BHP Billiton said the four principles of sound tax reform were not present in the proposed super tax.
BHP Billiton believes any new tax on the minerals resources industry needs to be prospective in application, so as to preserve Australia's position as a stable place for investment.
It also feels that the government needs to ensure the overall tax burden is competitive with other mineral resources countries, or Australia will lose investment to countries with more attractive tax regimes.
BHP Billiton suggested that the tax vary by commodity, because the investment characteristics and margins of individual minerals are different, and that it be levied on the value of minerals alone - and not unintentionally penalise investments in infrastructure, processing or other enabling activities.
"BHP Billiton conveyed to the Resource Tax Consultation Panel that the proposed tax does not recognise how investment decisions are made in the industry and would place Australia in an uncompetitive position globally," the group said in a statement.
In particular, BHP Billiton urged the panel to recommend to the government that the time be taken to properly engage with the industry on all aspects of the tax rather
than pursue selective adjustments to achieve the objectives of tax reform that benefits Australia.
- I-Net Bridge