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An empirical analysis of the tax burden of mining firms versus non-mining firms in Australia

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Published on 01 Apr 16 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

This study investigates both the explicit and implicit tax burdens of mining firms versus non-mining firms in Australia for the period from 2006 to 2009. Explicit tax burdens are measured by current effective tax rate. Implicit tax burdens are present if firms receiving tax subsidies suffer reductions in pre-tax rate of return.

The results show that mining firms have a lower explicit tax burden than non-mining firms after controlling for firm size, capital intensity and foreign operations. Mining firms do not incur offsetting implicit tax on the mining specific income tax subsidies, but non-mining firms suffer implicit tax on the tax subsidies received. Moreover, mining firms are found to have a significantly higher pre-tax rate of return on equity than non-mining firms because low resource taxes on resources extracted from Australia mean low cost of sales for mining firms.

Author profiles

Estelle Xuerui Li
Estelle completed her doctoral degree from The Australian National University in 2018.
Click here to expand/collapse more articles by Estelle Xuerui Li.
Dr Alfred Tran
Alfred is a Honorary Associate Professor, Research School of Accounting, The Australian National University. - Current at 17 April 2020
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