Resources tax may be credit negative
The proposed resources super profits tax would be neutral in terms of ratings for most debt issuers in the resources sector, Moody’s Investors Service says.
“It would only exert a low-to-medium negative financial impact, but such effect would be containable within existing ratings,” Moody’s vice-president Ian Lewis said in a special report on the implications of the proposed tax.
“On the other hand, for a few companies with low levels of commodity and geographic diversification, and which now pay lower tax via resource royalties, the incremental impact would be more meaningful.”
Mr Lewis said the offshore oil and gas sector would be relatively less affected by RSPT, when compared with other commodities producers because it was already covered by the Petroleum Resources Rent Tax.
He also said that under the proposed RSPT, some mature projects could be relatively better off than under the royalty tax system.
“Junior resources companies also stand to benefit the most from the exploration expense rebate and the government’s proposed scheme could effectively and partially underwrite losses incurred in failed projects,” Mr Lewis said.
The federal government proposes to introduce the tax from July 2012.
It has promised to consult with the resources sector before the legislation is finalised.
“At this stage, it is too early to assess the precise financial impact of RSPT, and key variables would be the price environment prevailing in 2012 and beyond,” Mr Lewis said.
Similar Posts:
- Wooldridge Place gets 5-star recognition
- Corporate detective Jules Kroll plans ‘sceptical’ credit ratings agency
- HMRC faces huge loss in tax debt after letting companies put off paying bills
- Ireland: A change too far | Editorial
- Investors gamble on election outcome
Recent Comments