The federal government has said that they can’t declare the tax accumulated in treasurers’ fund as a result of mining tax. The treasurer said “it is not good to disclose the tax details of individual taxpayers”. It will be a breach of the commonwealth laws to protect privacy. Various parties and crossbenchers have shown strong objection on this issue. They are demanding that government should disclose the revenue generated from the mining companies. They also commented that, if the government has not generated any revenue within six months, it cannot do so in future also.

As reported by newspaper, ‘The Australian’, BHP Billiton, Rio Tinto and Xstrata are not going to pay mining tax for the second quarter of this year. Finance minister said that the Australian taxation office has conveyed to government not to disclose any sensitive personal information on this issue. The Australian Tax office believes that doing so will be a breach of the privacy required under the Taxation Administration Act.

The real reason behind less revenue generation can be initial high costs involved in the basic ore extraction process in the mining industry. Big mining companies pay a huge amount for setting up initial infrastructure. In the end it results in very less profits, so ultimately the government is left with even lesser revenue. A lot of grants and tax deductions available under this tax are also a significant reason to believe that the government may be earning less revenue. 

To know more about mining tax and other taxation related queries, please feel free to visit our webpage: 

bbw-services.com/tax/

The Australian share market is higher following a strong lead from Wall Street.

At 1015 AEDT on Friday, the benchmark SP/ASX200 index was up 70.1 points, or 1.35 per cent, at 5,280.9, while the broader All Ordinaries index rose 68 points, or 1.31 per cent, at 5,257.7.

On the ASX 24, the September share price index futures contract was up 72 points at 5,235 with 8,735 contracts traded.

This news story is reprinted from www.skynews.com.au

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THIS MORNING

In Australia, financial accounts and population data for the September quarter are released. In the US, the leading index and retail trade figures are released.

OVERNIGHT MARKETS

US Equities

US sharemarkets rallied sharply on Wednesday after the Federal Reserve gave a strong signal that it was on track to raise interest rates at some point next year - pointing to confidence in the US economy. At the close of trade, the Dow Jones was up by 288 points or 1.7%. The S&P 500 index was up by 2% and the Nasdaq gained 96 points or 2.1%.

US treasuries fell on Wednesday (yields higher) as the commentary from the US Fed opened the door further to interest rate hikes in 2015. US 2 year yields rose by 5pts to 0.609% while US 10 year yields rose by 7pts to 2.141%.

Major currencies fell against the greenback in overnight trade. The Euro eased from highs of US$1.2495 to lows near US$1.2320, and was around US$1.2330 in late US trade. The Aussie dollar rose from lows near US81.40c to around US82.30 and traded near US82.20c in late trade. And the Japanese yen traded between 116.80 yen per US dollar to JPY117.70 and was near JPY117.25 in late US trade.

World oil prices lifted on Wednesday as a drop in US oil inventories supported bargain hunting after nearly a week of selling. Brent crude rose by US$1.17 or 1.9% to US$61.18 a barrel while the US Nymex crude price rose by US54c or 1% to US$57 a barrel.

Base metal prices were mixed on the London Metal Exchange on Wednesday. Tin (down 3%)and nickel (down 2.4%) recorded the largest falls while aluminium managed to eke out a 0.8% gain. Gold rose with Comex gold futures up by US20c an ounce or to US$1,194.50 per ounce. Iron ore fell by US20c to US$67.90 a tonne on Wednesday.

YESTERDAY'S MARKET

Local Markets Update.

This news story is reprinted from www.businessspectator.com.au

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Fires And Floods Prompt Coalition Policy in Brief: The government has released a policy on 2nd Feb 2013, announcing a major relief for small businesses in Australia. If you are a small business owner, and your business is physically harmed due to any natural calamity like flood or fire, this grant can save you from the financial trouble. 

What is the Upper Limit of this Grant Amount? As per the Policy, small businesses are eligible to receive grants of upto $100,000. The government will charge an annual interest rate of 4% on the loan amount granted to the Australian small business owner. The time period for paying back this loan amount will be 7 years. 

I am a small business owner, am I eligible to receive this grant? To receive this grant, being a small business owner is the basic eligibility. Further if the natural disaster has caused physical damage to your business and there is sufficient evidence to prove this, the grant shall be provided to the small business. 

Are there any limitations of this Grant? Yes, this grant will be available only to those businesses, which fully comply with the eligibility criteria. Also, the deferral dates for lodging monthly activity statements will be provided to only those Australian small busineeses which have an annual turnover of more than $20 million.

Does this affect my business’ taxation obligations?

Yes, as per the Australian taxation office, 

a) All the affected businesses will be given a one month deferral for lodging their monthly activity statements. Note that this deferral will only be given to businesses having annual turnover of more than $20 million.

b) A GST and PAYG holiday will be provided to affected businesses.

c) Generally ATO charges a penalty interest for providing incorrect information about PAYG tax. But it is giving a six month relaxation period and no fine will be imposed for providing the wrong PAYG details for the fist six months. 

According to Bruce Bilson (small business minister), the policy has aimed to set out practical steps to solve problems faced by small businesses during natural disaster. 

If you are a small business owner and worried about the safety of your business, you can avail a free one hour consultation on disaster recovery from our representatives. Please visit our website bbw-services.com and order a free consultation today.

Chartered Accountants Australia

Australian consumers are the gloomiest they have been in three years.

The Westpac-Melbourne Institute measure of sentiment fell by 5.7 per cent in December.

The index reading of 91.1 points was the lowest score since August 2011.

Westpac’s chief economist, Bill Evans, said it was a very disturbing result.

"The index is now at its lowest level since August 2011 when it briefly fell below 90," Mr Evans said. "Prior to that you have to go all the way back May 2009 to see a period when the Index printed consistently below today’s level."

"Respondents may have been particularly unnerved by media references to an ‘income recession’" Mr Evans said, as national incomes declined and overall economic activity contracting in the quarter in every state apart from NSW.

The Australian economy grew at a much slower-than-expected pace in the third quarter as the slump in capital spending dragged on growth, according to official data.

The weak reading in the September quarter national accounts also dragged down the index, said Mr Evans, which showed the economy had "been limping along" at a 1.6 per cent annualised growth pace for the last six months.

“Respondents are clearly concerned about the outlook for the economy and job security. In addition there is ongoing disillusionment about the May Budget, six months after it was announced."

The survey also recorded the most negative responses on news recall in decades, with respondents assessing news items to be extremely unfavourable on topics such as economic conditions, budget and taxation and employment.

Mr Evans said they received the most negative responses on news recall since March 2001 on economic conditions, September 1986 on budget and taxation, and December 1975 -- the beginning of the survey -- for employment.

“These readings are almost certainly an overreaction but do highlight significant risks to spending, particularly over the course of the next few months," Mr Evans said.

This news story is reprinted from www.businessspectator.com.au

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Australian Prime Minister has said that millionaire taxpayer companies like Google and Apple would be required to publish their tax arrangements. This move is a result of Australia’s efforts to curb down the tax avoidance schemes being implemented by big names in corporate world. According to Assistant Treasurer David Bradbury, many big companies have been hiding their actual income and transferring it to other nations where taxes are comparatively lower. “We want to make sure that large multinationals companies are paying their fair share”, he said. According to sources, around 2000 companies would fall in this category including BHP Billiton and Rio Tianto with a turnover of more than $100Million. 

The research behind proposed amendments in tax policy has been done by Australia’s Minority Labor Government. Last year, the Australian government had released draft revisions to the existing tax laws to control profit shifting from Australian territory. Similar moves have been taken in past by Britain and Germany as well as this issue was also raised during the group conference of 20 wealthy nations. The revision to tax laws would be decided by a voting which is scheduled after 14th May budget. The Australian government seeks support from independent lawmakers and Greens holding power in parliament. Reduction in the tax rebates would be seen for IT companies which were avoiding tax by simply opting for online sales. Currently, Australian government charges corporate tax of 30% which is higher than many other countries. 

With this future plan, the government plans to have an effective system where corporates prefer transparent tax arrangements and fulfil their taxation obligations

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AUSTRALIA’S unemployment rate continued its slow but steady rise in November, reaching 6.3 per cent, the highest level in more than 14 years, as more Australians started looking for work. 

The Australian dollar jumped more than half a US cent to US83.7c in morning trading as investors focused on the 43,000 new jobs were created between October and November, around twice what economists had expected, lifting total employment in the economy to 11.64 million.

But almost 95 per cent of these were part-time jobs. Full-time employment increased 1800 to 8,059,400, while the number of unemployed Australians rose by 4700 to 777,700, equivalent to around five times the number of outstanding newspaper and online job advertisements across the country.

The participation rate — which measures the share of the working-age population in or looking for work — rose 0.1 percentage points to 64.7 per cent, contributing to the rise in the headline unemployment rate from 6.2 per cent in October to 6.3 per cent in November.

Economists have cast a sceptical eye over Australia’s official jobless figures since the ABS repudiated its own seasonal adjustment process following a spate of incredible monthly changes in employment.

The ABS introduced a new seasonable adjustment process in October.

The unemployment rate was last as high as 6.3 per cent in September 2002.

“From here — and now that the ABS appears more comfortable with the veracity of the survey — we expect the unemployment rate to level out,” ANZ’s Savita Singh said.

“This report will not go far enough to dissuade those looking for interest rate cuts. While we acknowledge the risks lie in that direction, we think the probability of a rate cut remains below 50 per cent.”

This news story is reprinted from www.theaustralian.com.au

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Political and business leaders are touting the next 12 months as a make-or-break year for the country’s reform agenda - and Australia’s economy.

A number of big changes will be proposed and debated. These include tax reform, a major shake-up of federal-state relations and workplace relations change.

The stakes are high. With global growth faltering and concerns about our own economic performance rising, our leaders are urging the public to support the changes.

The alternative is that Australia risks returning to the dark days of 1970s stagnation. Yet these ambitious reforms have little chance of becoming reality. The likelihood is the electorate will reject each in turn – or at least force them to be significantly watered down.

Why will this happen? It won’t be for the reasons likely to be advanced by our political and corporate elites in 12 months time.

It won’t be because the public is too “immature” to accept the tough reform medicine required to underwrite future prosperity. And it won’t be because the Senate’s minor or micro-parties will have put their own political interests ahead of the national interest by blocking reform.

This news story is reprinted from theconversation.com

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The Australian dollar plummeted to fresh 4½-year lows on Wednesday as the country entered a technical income recession and gross domestic product expanded just 0.3 per cent in the September quarter.

At midday, the Aussie was trading at US84.07¢, having earlier dropped about half a US cent to US83.92¢. The sharp decline reflected market surprise at the weakness of Wednesday's national accounts. 

The Australian Bureau of Statistics said the value of goods and services produced in the quarter expanded 0.3 per cent in seasonally-adjusted terms, translating to year-on-year growth of 2.7 per cent.

This compares with an average 2.9 per cent over the past decade and a 15-year average of 3.1 per cent. Wednesday's data was well below economists' forecasts of about 0.7 per cent for the month and 3.1 per cent for the year.

Growth was led by the contribution from export volumes but was held back by weak business inventories and public and private sector investment.

The figures follow GDP growth of 0.5 per cent in the previous quarter, which translated to growth of 3.1 per cent year on year.

Real net national disposable income, which measures what Australian governments, businesses and households receive in exchange for goods and services, contracted for the second quarter in succession, which is the normal definition of a recession.

It shrank 0.3 per cent, after falling 0.2 per cent in the June quarter. The contraction largely reflects sliding commodity prices, which has led to a sharp fall in the country's terms of trade. 

The ABS said the terms of trade fell 3.5 per cent in the quarter, for a year-on-year decline of 8.9 per cent.

What Australia earns in exports buys a decreasing amount of imports. This weakening exchange also shows up in falling government tax receipts, weaker corporate profits and declining or stagnant real wages.

ANZ chief economist Felicity Emmett described the slowing growth as a "disappointing result". She said that, when measured in income terms, nominal GDP contracted 0.1 per cent in the quarter.

"Soft income growth will weigh on profits, wages and public revenues, and flow through to softer consumer spending, business investment and public demand," Ms Emmett said.

She said the data revealed that non-resources industries had been slow to pick up the slack left by the end of the mining infrastructure boom.

"Moreover, the drag from the wind-back in mining investment still has a long way to run and is likely to be much sharper over coming quarters as large-scale LNG projects approach completion."

This news story is reprinted from www.smh.com.au

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The Inspector-General of Taxation (IGT)has concluded that overall, the agreed recommendations in a number of IGT reviews into the ATO have either been implemented by the ATO, in whole or part, have prompted ATO action toward the realisation of intended improvements or will be examined in later IGT reviews. The findings have been released in the following reports:

Follow up review into delayed or changed Australian Taxation Office views on significant issues (‘‘U-turns’’ review), and

Follow up review into the Australian Taxation Office’s implementation of agreed recommendations in five reports released between August 2009 and November 2010.

The Follow up review into delayed or changed ATO views on significant issues (‘‘U-turns’’ review) examined the ATO’s implementation of recommendations made in its original report, Review into delayed or changed ATO views on significant issues (the so-called ‘‘U- turns’’ review) of March 2010. 

The term ‘‘turns’’ is commonly used to refer to situations where the ATO retrospectively applies its changed views on significant interpretative matters or administrative practices. 

The IGT found that the ATO fully implemented three of the four administrative recommendations, while fourth has been partially implemented. Two additional recommendations were made ensure that the ATO properly implements holistic approach to managing ‘‘U-turns’’.

The ATO has agreed to implement these additional recommendations.

The Follow up review into the ATO’s implementation of agreed recommendations in five reports released between August 2009 and November 2010 looked at the ATO’s implementation of agreed recommendations made in five separate reports released between August 2009 and November 2010.

The IGT found that all recommendations had been actioned, were being actioned or will be addressed in later IGT reviews.

This news story is reprinted from CCH Tax Week 

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Australia's biggest companies can keep their tax bills secret for another year after the federal government rejected calls to bring forward laws designed to increase transparency.

Finance Minister Mathias Cormann dismissed a push by Labor Assistant Treasurer Andrew Leigh to bring forward by one year the publication of data about the tax paid by companies with total income over $100 million.

If the bill were passed it would require the Australian Taxation Office to immediately publish on its website information about Australian companies' taxable income, and total income and tax paid for the 2012-13 financial year. The Tax Office can publish the information for both public companies and private businesses.

Mr Leigh said making Australian companies publish exactly how much tax they pay in Australia each year could pressure them to stop profit shifting. The current tax transparency laws, which Labor rushed through Parliament weeks before it lost government, require Tax Commissioner Chris Jordan to start publishing from next year information for the 2013-14 year.

Mr Leigh said Labor moved to bring the laws forward by one year so Australians could immediately see the books of Australia's largest companies and know exactly how much tax multinationals paid. "Greater information disclosure will allow for a more informed public debate, creating an environment for better policy development," he said.

"At the same time, improved transparency promotes trust and credibility in our taxation system while discouraging large multinationals from engaging in aggressive tax avoidance practices."

But Senator Cormann did not agree to bring them forward, instead saying: "Labor in government mismanaged the economy and the budget. Now they're admitting they mismanaged their own tax agenda as well."

Senator Cormann did not respond to Fairfax Media's questions about whether the Coalition would dump the existing laws to begin publishing 2013-14 tax information of Australia's top companies by next year.

Coalition members including Treasurer Joe Hockey, who has been trumpeting the G20 agenda to clamp down on tax avoidance by multinationals, voted against the laws in opposition.

Former assistant treasurer Arthur Sinodinos said in an interview before he stepped down that the Coalition voted that making such information public would mislead the public and "detracts from being well informed about whatever it is we're seeking to uncover".

In Australia at present only two mining companies, Rio Tinto and BHP Billiton, voluntarily publish reports about how much tax they pay in Australia and around the world. Most companies do not make it easy for the public to find detailed information about their tax affairs.

The laws would not have an impact on US technology companies such as Apple and Google, which have copped the bulk of criticism against multinationals who profit shift, as they are headquartered outside Australia. But some European countries also require certain companies to make their tax information public.

The Tax Office supports local companies being more transparent. Second commissioner Andrew Mills said in a recent interview ¬that companies needed to be open about their tax affairs to avoid damaging their reputation. "Sunlight is a great disinfectant," Mr Mills said in his first interview since taking the Tax Office role in December.

But the main man leading the tax avoidance hunt on behalf of the OECD prefers that such information stays in the hands of government rather than being made public. Head of tax for the OECD, Pascal Saint Amans, told Fairfax Media in an interview ahead of the G20 summit in Brisbane it would be better for tax authorities to collect the information confidentially than risk not getting it at all.

This news story is reprinted from www.smh.com.au

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