Ahead of the G20 meeting of finance ministers and central bank chiefs from major economies in Sydney at the end of the week, I have called on the Abbott Government to get serious about tightening tax rules so that multinational corporations pay their fair share. For the first time Australia has a decision making role at the G20 and Labor urges the Government to use the occassion to make sure it produces concrete actions rather than a series of platitudes.
IT’S TIME TO BRING INTERNATIONAL TAX RULES INTO THE 21ST CENTURY
Shadow Assistant Treasurer, Andrew Leigh, has called on the Treasurer to show strong leadership at G20 Finance Ministers’ meeting this week to achieve global action to crack down on multinational corporations that pay little or no taxation at all.
“Since coming to office, the Abbott Government has talked a big game on multinational profit-shifting. But all it has done is to water down Labor’s sensible reforms that ensure multinationals pay their fair share,” said Dr Leigh.
“On 14 December 2013, Assistant Treasurer Arthur Sinodinos announced that it would abandon a $700 million measure to prevent multinational firms reducing their tax bill.
“On 4 January 2014, Senator Sinodinos said he was considering abandoning measures that required 200 of Australia’s largest firms to disclose their total income, taxable income and tax paid.
“The Coalition seems to favour loopholes and secrecy – not fairness and transparency.
“It’s not fair that under existing rules global firms can siphon profits earned in Australia to low-taxing countries.
“That’s hundreds of millions of dollars of tax revenue lost that could go towards Australian hospitals, schools and infrastructure,” Dr Leigh said.
“When tax rules allow businesses to shift their income away from where it was produced, it erodes that country's tax base and shifts the burden onto individual taxpayers.
“International tax rules are not keeping pace with changes in the digital age and the realities of doing business in our globalized world. Rapid and dramatic shifts in global economic activity, driven largely by e-commerce, pose very real and significant risks to Australia's corporate tax base and the tax bases of countries right around the world.”
A number of Australian media companies have come out this week to urge reform.
“There is a pressing need for action. This week’s G20 finance ministers is a potential watershed moment in international tax policy,” said Dr Leigh.
“Labor advanced a fair agenda to combat tax avoidance and evasion. It’s up Joe Hockey and Arthur Sinodinos to take up the baton left by Wayne Swan and David Bradbury so multinationals pay their fair share of tax.
“Until they do Australian households and businesses will have to take on a higher tax burden and local communities suffer.”
TUESDAY, 18 FEBRUARY 2014
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