Bil­lions lost in NW Shelf taxes: re­port

Pilbara News - - News - Shane Wright and Tom Zaun­mayr

WA and Fed­eral tax­pay­ers may have been short-changed bil­lions of dol­lars by oil and gas pro­duc­ers ex­ploit­ing the North West Shelf, an ex­plo­sive re­port from the na­tional Au­di­tor-Gen­eral re­veals.

A re­view of the roy­alty sys­tem found com­pa­nies claimed de­duc­tions they were prob­a­bly not en­ti­tled to while au­thor­i­ties — State and Fed­eral — had failed to re­view the tax sys­tem of­ten enough over the years.

In an 18-month pe­riod, dur­ing which com­pa­nies pro­duc­ing oil and gas from the North West Shelf had rev­enues of more than $19 bil­lion, they claimed more than $5 bil­lion in de­duc­tions.

Those de­duc­tions cov­ered op­er­at­ing costs, de­pre­ci­a­tion, cost of cap­i­tal, ex­cises, pro­cess­ing tar­iffs and joint ven­ture par­tic­i­pant costs.

They slashed the amount of roy­al­ties that were paid, which, in the pe­riod, amounted to $1.9 bil­lion, of which $1.3 bil­lion flowed to the WA Gov­ern­ment.

But the Au­di­tor-Gen­eral’s re­port said it ap­peared many of the de­duc­tions could not be made.

“The Roy­alty Sched­ule does not per­mit all the de­duc­tions cur­rently be­ing claimed,” it said.

“On this ba­sis, the Aus­tralian Na­tional Au­dit Of­fice has doubts about the el­i­gi­bil­ity of de­duc­tions claimed for the cost of debt and eq­uity-funded cap­i­tal, ex­cise paid on crude oil and ex­cise paid on con­den­sate.”

The Fed­eral In­dus­try Depart­ment is re­spon­si­ble for rais­ing and col­lect­ing the roy­al­ties from com­pa­nies op­er­at­ing in the North West Shelf, re­ly­ing in part on the WA Depart­ment of Mines and Pe­tro­leum.

Both de­part­ments main­tained the roy­alty col­lec­tion sys­tem was “ro­bust”, with the WA agency ar­gu­ing the Fed­eral and State gov­ern­ments could be con­fi­dent that roy­al­ties are be­ing “ac­cu­rately as­sessed and col­lected”.

WA Na­tion­als leader Bren­don Grylls said he had big­ger con­cerns about the oil and gas in­dus­try, most no­tably its tar­get of meet­ing a 15 per cent do­mes­tic gas reser­va­tion pol­icy.

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