Andrew Leigh

TIME FOR TURNBULL TO GET TOUGH ON TAX HAVENS AND MULTINATIONAL TAX AVOIDANCE

One in three large firms still pay no tax in Australia.

Data issued by the Australian Taxation Office at 5pm today showed that 732 out of the 2043 companies examined failed to pay any tax the 2015-16 tax year. The companies that paid no tax include 108 firms reporting more than $1 billion in total income.

These figures highlight the failure of the Turnbull Government to make our tax system fairer. The only reason we know that 36 per cent of companies failed to pay any tax is because of Labor’s tax transparency laws, which passed the Parliament in 2013 amid objections from the Coalition.

Despite this, Malcolm Turnbull and his team still believe that cutting company tax rates – and punishing working and middle class families in the process - should be Australia’s top economic priority.

It does not get more out of touch than this. 

The Turnbull Government talks a big game on multinational tax, but they’ve spent more on spruiking their laws than their legislation has directly raised.

Labor will continue to lead the debate on multinational tax avoidance.

If the Turnbull Government was serious about tax fairness, it would adopt Labor’s plan to close loopholes and crack down on tax havens, by:

1. Tightening debt-deduction loopholes used by multinational companies, improving the Budget by more than $4 billion over the medium term.
2. Introducing public reporting of country-by-country reports. High-level tax information about where and how much tax was paid by large corporations (over $1 billion in global revenue) should be released.
3. Providing protection for whistleblowers who report on entities evading tax to the Australian Taxation Office. Where whistleblowers’ information results in more tax being paid, allow them to collect a share of the tax penalty (a reward of up to $250,000).
4. Introducing a publicly accessible registry of the beneficial ownership of Australian listed companies and trusts. This will allow everyone to find out who really owns our firms. Shareholders should not be able to use complex structures and sham ownership to avoid complying with corporate transparency rules.
5. Introducing mandatory shareholder reporting of tax haven exposure. Companies must disclose to shareholders as a ‘Material Tax Risk’ if the company is doing business in a tax haven.
6. Appointing a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes.
7. Introducing public reporting of Australian Transaction Reports and Analysis Centre (AUSTRAC) data and require the annual public release of international cash flow data.
8. Requiring government tenderers to disclose their country of tax domicile. All firms tendering for Australian Government contracts worth more than $200,000 should state their country of domicile for tax purposes.
9. Developing guidelines for tax haven investment by superannuation funds. This should be done by the Australian Tax Office, in collaboration with the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.
10. Requiring that the Australian Taxation Office’s annual report provide information on the number and size of tax settlements.
11. Delivering more tax transparency by restoring Labor’s $100 million threshold for public reporting of tax data for private companies. This threshold was raised to $200 million by the Liberals and Greens, exempting two-thirds of private firms from tax transparency.

When multinationals don't pay their fair share, Australians have to pick up the tab. That’s just not fair.

THURSDAY, 7 DECEMBER 2017