COALITION ALL SIZZLE AND NO SAUSAGE ON MULTINATIONAL TAX AVOIDANCE
The Coalition’s approach to multinational tax avoidance boils down to two tactics: telling the public what they won’t do, and claiming credit for revenue raised by Labor’s laws (which they voted against in 2013).
The latest announcement by Treasurer Josh Frydenberg is more of the same: explaining why he won’t implement a digital sales tax, while failing to offer any concrete action on multinational tax avoidance.
The Treasurer talks vaguely about supporting global reform of the tax system, but Australia is largely missing in action from the international reform process. We are no longer represented on the Steering Group of the OECD’s Inclusive Framework on BEPS - a key body that has been shaping the multinational tax reform agenda.
Meanwhile, the Treasurer has been quick to rule out Labor’s measures to close tax loopholes. Just as the Coalition voted against the Gillard Government’s multinational tax avoidance laws (they claimed the laws were retrospective), they now oppose our measures to close debt-deduction loopholes and provide more accountability and transparency for firms operating in tax havens.
The Coalition is spending millions of dollars on taxpayer-funded ads designed to persuade people that it is closing tax loopholes. Meanwhile, they appear to have no new agenda for actually reforming the multinational tax system.
If the Coalition was serious about the issue, they would commit to Labor’s multinational tax plan to crack down on tax avoidance and tax havens in April’s budget.
If elected, a Shorten Labor Government will:
- Tighten debt-deduction loopholes used by multinational companies, improving the Budget by $3 billion over the medium term
- Close a debt deduction loophole to ensure consistent treatment in related party financing arrangements
- Automatically deny deductions from companies for travel to and from tax havens, and clamp down on unsubstantiated allowances related to tax havens
- Increase penalties for individuals and entities promoting tax evasion and avoidance
- Crack down on citizenship shopping by requiring all individual Australian taxpayers to notify and declare to the Australian Taxation Office if they have residency or citizenship of any other jurisdiction and the name of that jurisdiction
- Introduce public reporting of country-by-country reports, ensuring the release of high-level tax information about where and how much tax was paid by large corporations (over $1 billion in global revenue)
- Provide protection for whistleblowers who report on entities evading and, where whistleblowers’ information results in more tax being paid, allow them to collect a share of the tax penalty
- Introduce a publicly accessible registry of the beneficial ownership of Australian listed companies and trusts, allowing the public to find out who really owns our firms
- Introduce mandatory shareholder reporting of tax haven exposure, requiring companies to disclose to shareholders as a ‘Material Tax Risk’ if the company is doing business in a tax haven
- Appoint a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes
- Introduce public reporting of Australian Transaction Reports and Analysis Centre (AUSTRAC) data and require the annual public release of international cash flow data
- Require all firms tendering for Australian Government contracts worth more than $200,000 to state their country of domicile for tax purposes
- Develop guidelines for tax haven investment by superannuation funds
- Require that the Australian Taxation Office’s annual report provide information on the number and size of tax settlements
- Restore Labor’s $100 million threshold for public reporting of tax data for private companies, which was raised to $200 million by the Liberals and Greens in a move which exempted two-thirds of private firms from tax transparency
If only this divided, dysfunctional government could spend as much energy on real multinational tax reform as it does on claiming credit for laws it voted against, and explaining why it doesn’t need to do anything else.
Authorised by Noah Carroll ALP Canberra.