Quote:
Originally Posted by FactaNV
If this province was smart we'd take a quarter for ever dollar extracted (if a safe way is discovered) and start a sovereign wealth fund. Cost of doing business.
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Yes FactaNV you're onto something in emulating the Norwegians.
I dug into
MB's mining tax structure. It's basically 10-17% of profit, with some weird bulk payouts at the $50m and $100m profit milestones.
The problem with this, is profit can easily be buried. And mines are risky so they don't always turn profit. So a mine could pull tons of resources, operate at breakeven, and gov't makes nothing in tax revenue. Additionally, the tiered rates discourage expansion.
As you mention, a proper royalty structure would make more sense here. Paid off the TOP line revenue at a fixed percent. NOT profit, and NOT tiered. I'm unsure what that percentage would be to correlate with similar current profit tax structures.
But this way future mines discount the value of their reserves right off the top, by paying gov first. They're also not punished for increasing production like with tiered tax rates. Ramp up. Build. The more you make the more you keep, and the more the gov makes in return. Everyone wins.
This way you're literally paying for the resource you take. Not your ability to extract it.