BHP Billiton paying its fair share of tax – financial chief

BHP BILLITON said yesterday that its total economic contribution globally in the 2016 financial year was $26.7 billion (R371.8bn). The company said this included $3.7bn globally in taxes, royalties and other payments to governments.

Last month, the Anglo-Australian mining giant posted a record full-year loss of $6.4bn on significant write-downs and impairments, as well as weaker commodities prices, hurt its bottom line.

Releasing the “Economic contribution and payments to governments report” yesterday, BHP Billiton chief financial officer Peter Beaven said the company’s adjusted effective tax rate in the 2016 financial year was 35.8 percent.

In a statement, Beavan said the rate was more than 58 percent when royalties were included, demonstrating that BHP Billiton was paying fair share of tax.

“The company’s adjusted effective tax rate averaged 31.9 percent over the past decade, and 39.8 percent when royalties were included,” Beaven said. “Over the last decade, our average effective tax rate was higher than the 30 percent company rate in Australia and the average Organisation for Economic Co-operation and Development rate of 25 percent.” its

Commitment Beaven said the report was in line with BHP Billiton’s commitment to transparency.

“Debates about tax need to be informed by facts. It is crucial that the conversation addresses how tax systems take into account the realities of operating in a global economy, as well as national interests. This will enable stable investment environments that encourage growth and development,” Beaven said.

The report details payments BHP Billiton made to governments during the 2016 financial year on a country-by-country and project-by-project basis.

Other payments made were significant contributions to suppliers, voluntary contributions to host communities, wages and employee benefits and dividends.

In the last decade, BHP Billiton paid about $85bn globally in taxes, royalties and other payments to governments, including $58bn in Australia.

But the Australian Taxation Office yesterday hit BHP Billiton with fresh tax assessments in a dispute over the price at which it sold commodities to its Singapore-based marketing business over more than a decade.

Shares rose 0.35 percent to R186.66 yesterday.