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Budget Paper No.2 Fiscal and Economic Outlook 2008-2009



Budget Paper No.2 Fiscal and Economic Outlook 2008-2009

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Tabled paper 1293


Tabled papers for 10th Assembly 2005 - 2008; Tabled Papers for 10th Assembly 2005 - 2008; Tabled papers; ParliamentNT; Tabled Papers




Tabled By Delia Lawrie


Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.




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71 internationally sourced bets. Domestically sourced bets do not incur tax because they are subject to GST. Wagering tax is imposed on both on-course and off-course totalisators at the rate of 40 per cent of the licensees commission. Tax of 20 per cent of the licensees commission is paid for races other than thoroughbred, harness and greyhound races and Australian sports. Tax at the rate of 10 per cent of the licensees commission is paid for international sports. Financial Taxes From 1 July 2001, financial taxes have generally comprised debits tax and stamp duty on leases, mortgages, hiring arrangements and electronic debits. The Northern Territory does not charge stamp duty on mortgages and has already abolished all the other taxes in this category. Mining and Petroleum Revenue Mining revenue is obtained from royalties or rent equivalents levied on the recovery of mineral commodities from a mining tenement in the Northern Territory. Similarly, petroleum revenue accrues from royalties imposed on the production of petroleum in the Territory. Mineral and petroleum royalties are not a tax but a charge for resource usage, payable to the Government as the owner of the site or the mineral or petroleum rights over the site. Mining and petroleum revenue is forecast to be $88 million in 2008-09. The Territorys mining royalty revenues are based on both profits-based and ad valorem regimes, whereas ad valorem regimes predominate in other jurisdictions. The Territorys petroleum royalty revenues are based on an ad valorem regime, after allowing post wellhead costs up to the point of sale. The Territorys profits-based regime uses the net value of a mines production to calculate royalty. In contrast, ad valorem regimes calculate royalty based on a mines gross production value. Other royalty schemes calculate royalty on the tonnage of minerals extracted. The Northern Territorys profits-based regime is less likely to impact on investment decisions as it is a fixed share of the returns derived from a mining venture. This means that: both prices and mining costs are taken into account in royalty calculations. If commodity prices or production costs rise or fall, royalty may decline or increase accordingly; and mines operating in isolated locations or with high costs of extraction may pay less royalty than mines in good locations or with simple operations. This is contrasted with an ad valorem royalty scheme which tends to increase the royalty share of returns for less profitable mines and reduce the royalty share of returns for more profitable mines. Mineral royalties are collected in the Northern Territory from mining and quarrying for gold, silver, bauxite, manganese, lead, zinc, sand, gravel, laterite, vermiculite and lime. Royalties are not collected in respect of uranium mining in the Territory, as the Commonwealth retains ownership of uranium in the Territory. A grant in lieu of uranium royalty is paid by the Commonwealth to the Territory.