Australia Plans to Impose 40% Tax on Resource Profits By Gemma Daley and Marion Rae May 2 (Bloomberg) -- Australia will impose a 40 percent tax on the profits of resource companies like BHP Billiton Ltd. and Rio Tinto Group to pay for infrastructure, retirement and company levy changes as part of the broadest overhaul of its tax system since the Second World War. The government, commenting on Treasury Secretary Ken Henryâs 10-year tax plan, said the tax would start in 2012 and raise A$12 billion ($11.1 billion) in the first two years. The move to better tap into the nationâs mining boom, fueled by commodities demand from China and India, comes as Prime Minister Kevin Rudd prepares for an election later this year. âThis will use super profits on resources owned by all Australians,â Rudd told reporters in Canberra, saying heâs prepared for a backlash to the measures. âThis will help convert Australiaâs strong economic position today into enduring prosperity.â The changes set up a potential clash between Rudd and resources companies that make up 9 percent of the economy and last week warned that a 40 percent levy and double taxation with state royalties would threaten $108 billion worth of planned investment. âIf implemented, these proposals seriously threaten Australiaâs competitiveness, jeopardize future investments and will adversely impact the future wealth and standard of living of all Australians,â BHPâs Chief Executive Officer Marius Kloppers said in an e-mailed statement today. The companyâs effective tax rate will increase to 57 percent from 2013 from 43 percent now on its Australian earnings, it said. continued at: http://www.bloomberg.com/apps/news?pid=20601087&sid=afpeNRW8rJ4A&pos=3