Companies

Jan 16, 2014

Corporate tax avoidance is rife — but the ATO is willing to trust them

Accountancy firms can sign off on corporate tax returns under changes proposed by the Tax Office. Are we letting companies off the hook? Tax consultant and former ATO officer Chris Seage reports.

ATO

Google Australia allegedly paid no tax on an estimated $940 million in web search advertising revenue. Taxpayers protested outside of the British branches of the coffee chain Starbucks after it was revealed the corporate giant was recording tax losses despite making billions of dollars of sales over a 14-year period. G20 leaders agreed to secure new global standards for tackling tax evasion and avoidance due to erosion of corporate tax and profit shifting.

Worldwide tax avoidance has never been bigger. But down at the Australian Taxation Office, as Fairfax reports today, some boffin wants to let big accounting firms sign off on tax returns without further investigation by the Tax Office. The accountants must be laughing. But will consolidated revenue be the big loser?

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17 comments

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17 thoughts on “Corporate tax avoidance is rife — but the ATO is willing to trust them

  1. klewso

    Remember how the GST was “going to eliminate the black economy” – one of Howard’s reasons it was going to be “so good”?
    Besides, isn’t that why God created us plebs – to make up for these sort of shortfalls?

    [Where were these “accounting” firms when the GFC took off?]

  2. MJPC

    GS, don’t you know that corporations are all honest and forthright global citizens, just ask Exxon or BP.
    This scheme sounds like a soft fall exercise for members of the ATO to take a redundancy from the ATO, then take up a position at the 4 nominated accountancy firms on a big fat pay packet doing audits that will find ways to avoid tax.
    It opens possibilities for other departments also. How about the prisons being run by the inmates, thus saving the cost for warders?
    Who cares if it works, as long as the LNP can look after the big end of town.

  3. JohnB

    @Klewso:
    I’m surprised that the Big Four have the spare resources to apply to this task.

    Aren’t they already flat out with cost-shifting, profit-shifting executive remuneration work?

  4. Jimmyhaz

    Just one of the big 4 banks has cost taxpayers more than all the welfare the government will give out this year, but I think I know which of these I will hear more about in the newspapers.

  5. Pedantic, Balwyn

    Congratulations to the LNP Government for yet another proposal to cut red tape for Big Business. One that will enshrine BB’s ability to avoid tax and thus place the burden for revenue firmly in the province of salaried employees and anyone else who lacks a good accountant.
    No doubt the drop in revenue will lead to more hand wringing by Hockey and his disciples about the need to cut “unnecessary” social welfare, increase productivity (redundancies)in the Public Service and other like statements that result in the rich becoming richer and the poor paying for it.

  6. CML

    Agree with the above comments.
    Since ‘big business’ already writes the laws/regulations, which affect them, for government, this seems to be the next step. Now they can say how much tax they are prepared to pay. Bloody outrageous!
    If you doubt my first statement, I seem to remember a 4Corners programme some years ago, actually showing this going on. I think it was related to the mining/resources industries. It was during Howard’s reign, so nothing was ever done about it. How can the rest of society just turn a blind eye to these criminal activities, when we know it will be the ordinary taxpayer who makes up the shortfall?
    Talk about voting against your own best interest! We need to get rid of this government ASAP!!

  7. Bill Hilliger

    Many believe it should all be outsourced to India or the US.

  8. Observer

    Looks like Tony & Joe are outsourcing the audit function to big business interests. They should call it self audit. I note the Labor party seem to be silent on this.

  9. AR

    Wot JimmyH alludes to – imagine if all corporate welfare, diesel subsidies, tax holidays, deductions for advertising & dodgy “research”. We could give all single parent’s gold plated Bentleys to collect their kids from daycare and still slash the deficit.
    And then Alice awoke…

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