Australia to Impose Profit Tax of 40% on Mining Enterprises in 2012

On May 2, 2010 Australian Prime Minister, Mr. Kevin Rudd, told the media that Australian Government planned to impose a high tax on mining enterprises so as to distribute their huge profits more equitably.

According to Mr. Kevin Rudd, the Government planned to impose the profit tax of 40% on the mining industry to pay pensions, promote infrastructure construction and support small businesses, etc. As per his remarks, mineral resources belong to all the Australian people and therefore "the super profits thereof should be applied to the economic construction".

The Taxation Bill is to be implemented in 2012 when, by estimate, it can increase the revenue for Australia Government by USD 2.78 billion. Apart from Australia, India Government also recently announced a raise in the export duty on iron ores to 15% from previous 10%. It is reported that the move aims at supplying more iron ores for Indian domestic steel manufacturers. Since India is China's major supplier of spot iron ores, this raise might reduce China's purchase of Indian ores.