Davis commission calls for mining sector’s upfront capex tax to be scrapped
The Davis Tax Committee has recommended that the special tax regime for the mining sector be abolished so that its income tax regime is aligned more closely with that of other economic sectors. Implementing the recommendation would entail far-reaching changes to the way the mining industry has traditionally been taxed. The committee argued in its final report on hard rock mining taxes — released on Monday — that the royalty system could be relied on to deal with the nonrenewable nature of mineral resources. A previous interim report was published in 2015 for public comment. The committee said it had not been persuaded that the current mining tax system did much to encourage investment as originally intended. It has recommended that the upfront capital expenditure (capex) write-off regime should be discontinued and replaced with an accelerated capex depreciation regime, which is in parity with the write-off periods provided for in respect of the manufacturing (40-20-20-20) basis. Thi...
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