The Government’s important counselor on the resources super profits tax says that Treasury and the mining sector’s examination of their tax rates for mining firms are both right.

Senior Treasury Official and Chair of the Resources Tax Consultative Panel, David Parker, said that perplexity over the present tax rates shelled out by Australia’s resources organizations was triggered by a variance in the approach taken towards royalties.

Today, Mr. Parker told a business forum in Melbourne that the Treasury’s study of miners’ tax rates considered royalties as an input fee that led to a lower tax rate than analysis carried out by the miners.

He said, ‘‘The Treasury analysis ... says if you measure the income of the sector ... according to economic concepts and look at the actual amount (of) tax paid and treat royalties not as a tax but as an input cost, then you end up with a relatively low tax rate’’.

Mr. Parker said that the cause for that is that the mining industry is comparatively capital concentrated and is capable of gaining from the depreciation.

He said that the review taken on by resource firms centered on full taxable income and regarded royalties as a tax.