One of Australia's largest accounting firms is standing by its analysis of Labor's mining tax after Treasurer Wayne Swan rebuked it for distorting the public debate.
Mr Swan said the BDO Australia analysis of the minerals resource rent tax (MRRT) contained "substantial errors".
The analysis said design of the tax unfairly favoured large, established miners at the expense of smaller emerging players.
It also said mining giants BHP Billiton and Rio Tinto would not pay the tax for at least five years after it begins to operate from July 1, 2012.
In a letter to BDO partner John Murray, Mr Swan said: "These errors demonstrate that your analysis should in no way be taken as representative or even indicative of the expected operation of the MRRT."
Mr Murray on Wednesday told a parliamentary inquiry that his "conservative" analysis was made without Treasury revealing its own modelling of the tax.
Liberal backbencher Kelly O'Dwyer described Mr Swan's letter as "highly unusual" and "pretty brazen", especially as Treasury had not provided its assumptions to mining companies.
She described as "quite perverse" a situation where there was government criticism of the BDO analysis yet there was no information being made available about Treasury modelling.
Fortescue Metals Group executive Julian Tapp believes his company won't be paying significant amounts of the tax.
"We basically think when it comes to the agreement, the government have been sold a pup," he told a hearing of the inquiry in Canberra.
"It's not until the tax returns are filed they are going to discover that what they have got is not a piglet that is bringing home the bacon, it's a pup that is going to require feeding."
Junior miners were going to suffer a heavier tax burden than the big miners, Mr Tapp said.
Fortescue is proposing a cap to MRRT liability to a rate no higher than the highest rate paid by the three big miners - BHP Billiton, Rio Tinto and Xstrata - who negotiated the MRRT deal with the Gillard government.
Mr Murray said the cap would remove the inequity between big and small miners.
"The beauty of the design is if we are wrong, the cap will not interfere with the $11 billion Treasury believes will be raised in the first three years of MRRT," he later told reporters.
"If Treasury are wrong and we're correct, this is going to save small miners a huge cost imbalance between their operations and larger ones."
Mr Tapp said Fortescue may pay the MRRT in its first year but noted the $50 million threshold was a "very arbitrary" number.
"Of course, if you write it on a piece of paper it is a large number, but in industry terms it is next to no production at all," he told reporters.
The threshold would not represent commercial production levels for a company investing in iron ore.
Production levels around 10 million tonnes a year would roughly equate to a $500 million profit threshold in current values, Mr Tapp said.
Fortescue would pay corporate income tax of about $100 million for the 2011/2012 year.
