Big miners outline plans to reduce MRRT AUSTRALIA might never generate significant income from the mining tax, with three of the nation's largest miners outline plans to use up to $34.8 billion in tax credits to reduce future payments. On the same day Prime Minister Julia Gillard announced a $12 billion budget black hole, due partly to the weak revenue raised by the tax, the miners revealed their plans to use the deferred tax assets. A senate inquiry into the Mineral Resources Rent Tax on Monday also heard from the tax managers at BHP Billiton and Rio Tinto that the Australian Tax Office (ATO) was currently asking them whether their use of the credits to offset tax was legitimate. The MRRT taxes the super profits - profits above $75 million - of iron ore and coal producers, with an aim of sharing the benefits of the mining boom among all Australians. However critics complain about measures in the complex tax allowing large mining companies to avoid it being retrospective, revaluing assets up and then depreciating them down each year to reduce their MRRT. Leading economist Professor Ross Garnaut told the committee the MRRT might never raise revenue in its current form, since it wasn't now, and iron ore miners' profits would not get any better since prices are tipped to fall. It raised $126 million in revenue in the first half of the year after Treasurer Wayne Swan said it would be relied on to raise $2 billion this financial year. Prof Garnaut said while the miners might be entitled to avoid some tax for past expenditures on building mines, "the way chosen was extreme in its generosity." The head of the Minerals Council, Mitch Hooke, who opposes the MRRT, rejected that argument as simplistic in what was a complex assessment of future costs and revenue. BHP and Rio said the ATO had inquired with them about how they had calculated their mining tax payments, including whether they had had assets independently valued, with discussions ongoing. BHP paid $77 million in MRRT in the first half of fiscal 2012-13, while Rio and Xstrata paid none. Greens Senator Christine Milne accused the three companies of not paying a reasonable amount, with BHP's pre-tax profit from iron ore alone $4.8 billion in the latest half. BHP's head of tax Brian Purdy rejected that suggestion to the committee, saying BHP's tax rate was close to 45 per cent. "The MRRT is a top up tax, there is also royalties and company tax," he said. Rio says it is Australia's largest taxpayer, paying $8.9 billion last year, but it emerged at the hearing from Labor Senator Doug Cameron that $1.1 billion of Rio's supplied figure was paying employees income tax for them. The senate committee is a mix of coalition MPs who say the MRRT should be scrapped and that miners are paying their way through tax and employment, Senator Milne who says the miners should be taxed more and Labor MPs who also want it strengthened or left alone.