Australia’s biggest tax dodgers

Some ASX 200 companies need to cough up more tax, according to a new report. Source: AP
MANY of Australia’s biggest companies are dodging tax, forcing ordinary taxpayers to fund vital services, according to a new report.
Released today, the report Who Pays for Our Common Wealth? Tax Practices of the ASX 200 claims companies including Frank Lowy’s Westfield aren’t coughing up enough cash at tax time.
“While most individuals pay their fair share, some corporations bend the rules to legally lower their tax obligations. The rest of us pay the price,” the report says.
The report, which examines the tax practices of Australia’s largest publicly listed companies, shows the effective tax rate of ASX 200 companies over the last decade is only 23 per cent.
If the largest Australian listed companies paid taxes at the statutory corporate tax rate of 30 per cent, it would produce an additional $8.4 billion in annual revenues.
Westfield ... one of many Australian companies named in the report. Source: News Corp Australia
Report producers, United Voice union and Tax Justice Network Australia, say the report also reveals that 29 per cent of Australia’s top 200 listed companies pay effective corporate tax rates of 10 per cent or less.
“That is billions of dollars of foregone revenue for infrastructure, health and education,” United Voice national secretary David O’Byrne told Fairfax media.
Mr O’Byrne said “hardworking” Australians were footing more of the tax bill.
“What the report also shows is in the last five years, the proportion of total tax revenue that business paid has shrunk from 23 per cent of the pie down to 19 per cent,” he said.
“But individuals, ordinary hardworking Australians, have risen from 37 per cent to 39.
“So the tax base is shifting away from corporations, that have a greater capacity to pay, to individuals.”
The report, compiled from publicly available information, also found 14 per cent of ASX 200 companies pay no tax.
In 2013, 57 per cent of ASX 200 companies disclosed subsidiaries in secrecy jurisdictions (tax havens) — but this could be much higher as reporting is not mandatory.
The report does not suggest that any company is engaged in any illegal activities but suggests some ASX 200 corporations need to publicly explain their tax arrangements.
“The tax minimisation practices of a minority of very large companies may have a significant and disproportionate impact on Australia’s corporate tax revenue base,” it says.
“This problem needs to be addressed so that all companies, Australian and foreign-owned, large and small, compete on a level playing field and pay a fair share of corporate income tax.
“The opaque tax arrangements of many large corporations operating in Australia undermine confidence that these corporations contribute what they should to our common wealth.”
Money, money, money ... ASX 200 companies should give the ATO more of this stuff, a new report suggests. Source: News Limited
The report, produced in consultation with corporate tax expert Roman Lanis from Sydney’s University of Technology, has been released ahead of a briefing of federal MPs on Wednesday.
The Government has responded to the report, saying the Australia has a multipronged approach to ensure all companies “pay their fair share of tax”.
“We are implementing domestic policies to ensure that if companies make a profit here, then they pay tax here. This work will be further examined under our taxation white paper due to commence before the end of the year,” said a spokesperson for the treasurer.
“We are ensuring that the Australian Taxation Office will have access to information on financial accounts that people have in other countries as well as Australia. If individuals open bank acounts in other countries then there is a common reporting standard that will give the ATO the information it needs to combat tax evasion. This standard will apply from 1 January 2017.”
The Government says it is also focusing on a 15-point plan to combat base erosion and profit shifting delivered by the OECD.
“We are implementing a tax inspectors without borders policy that will strengthen global efforts to combat tax evasion by helping developing economies increase their skills and capability.”
Company tax is the second largest source of revenue in the Budget – forecast to raise $72 billion this financial year.
Each year company tax raises around 20 per cent of the entire Commonwealth Budget.
The latest Australian Taxation Statistics conform that less than one per cent of companies pay 62 per cent of all company tax. Just twelve companies pay third of all company tax.
The Government is cutting the company tax rate to 28.5 per cent (down from its current level of 30 per cent) from 1 July 2015, which will encourage investment in Australian businesses and help create jobs.
News Corp has contacted Westfield for a response.

View the original article here