South African royalty act and inlightenment to China's compensation fee for mineral resource

After a prolonged drafting and consultation process,the Minerals and Petroleum Resources Royalty Act (MPRRA) became effective on 1 March 2010.This legislation may have a significant impact on employment, foreign investment and future exploration in the South African mining industry.This article explores the historical background of the "Mineral and Petroleum Resources Royalty Act", describes the main royalty collection, the new royalty formula and the formula subsidies and relief policies,etc.This paper argues that levying a lower royalty rate on downstream beneficiation will help reduce the burden on enterprises.The royalty rate changing with the profits and setting the range can not only ensure that government can achieve a certain revenue in times of economic difficulties and a higher royalties in times of prosperity,but also achieve an optimal trade-off between earning large revenues for the owner, on the one hand, encouraging mining projects and extraction of mineral resources by private extractors, on the other. Whether the new royalty regime is internationally competitive and the impact on the downstream beneficiation of mineral resources has yet to be explored and studied.Based on above research,this paper argues,the reform in Compensation Fee for Mineral Resource should be to redefine the relationship between tax and fee,consummate the meaning and taxable objects, to adjust the rate system.