Amendments to South Africa's mine royalty bill could result in tax cuts for South African platinum companies and bring the country more in line with world mining standards.

The revisions to the controversial Mineral and Petroleum Resources Bill permit miners to deduct smelting, refining and transport costs before calculating royalties, while still retaining a taxation system based on gross revenue.

The draft, the third since the bill was first formulated in 2003, comes after mining companies have long argued for a profit-based system but met opposition from government figures who favour basing tax on gross revenue.

Under the terms of the revised bill, the new average rate for royalties on platinum will fall from 4.5 per cent to 2.7 per cent.

Roger Baxter, Chief Economist of the Chamber of Mines, welcomed the amendments and said they were a significant improvement on earlier drafts.

He told Reuters: "If you look at the first draft, there have been substantial improvements. It has been a very long journey."

Source:

UPDATE 2-SAfrica cuts tax rates in final mine royalty bill, 07/12/07
http://uk.reuters.com/article/oilRpt/idUKL0666947020071206

State eases terms of mines royalties bill, 07/12/07
http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A653053


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