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CANBERRA, April 23 (Reuters) - A sweeping review of Australia's taxation system, which has ruffled feathers in the key mining sector fearful it may increase their tax burden, will be released on May 2, Treasurer Wayne Swan said on Friday.
The tax review is tipped to recommend a new resources rent tax on mining projects, possibly replacing state-based royalty schemes, and other changes to business and personal taxation, and could provide pointers for the pre-election May 11 budget.
"We're determined to build a tax system that's simpler, fairer and stronger and the Independent Tax Review is a vital first step in that long-term plan for the future," Swan said in a statement from Washington, where he is attending G20 meetings.
"We haven't been distracted for one moment from the long-term challenges like tax reform, despite the global recession and Australia's success in staring it down."
Swan appointed Treasury Secretary Ken Henry two years ago to review Australia's tax system and recommend long-term reforms, with all parts of the tax system up for review apart from the 10 percent Goods and Services Tax (GST).
Newspapers have said Henry's report proposes a 40 percent mining resource rent tax, which would tax resource projects on a profit system rather than on production, and which would be based on the petroleum resource rent tax on offshore oil and gas.
The change would affect big miners such as BHP Billiton, Rio Tinto and Xstrata, and has been widely opposed by the mining industry.
At present, mining projects face a complex web of different royalty regimes across Australia's states and territories, with royalty rates averaging 3.5 percent of gross value of mineral production.
However, any move to curb state royalty schemes could face a major hurdle, with the premier of Australia's top mining state of Western Australia opposed to any major changes.
Australia's A$1.2 trillion ($1.1 trillion) pension-fund industry, known as superannuation in Australia, is also hoping the government will offer tax incentives to encourage savings and investment in pension funds.
The tax reforms will be a central plank of Prime Minister Kevin Rudd's plan for re-election. He holds a solid lead in opinion polls, with elections due in the second half of 2010 and likely in October.
The latest Reuters Poll Trend, released on Thursday, gave Rudd a 10.4 point lead over opposition leader Tony Abbott on the two party basis, which decides national elections.
($1=A$1.08) (Reporting by James Grubel and Rob Taylor; Editing by Kazunori Takada)