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Crikey Says

Mar 23, 2016

Sick to death of tax-dodging companies

If it wasn't already clear, Australia has a problem with corporate tax avoidance. Large companies, especially large foreign companies, are adept at avoiding their taxation obligations,

If it wasn’t already clear, Australia has a problem with corporate tax avoidance. Large companies, especially large foreign companies, are adept at avoiding their taxation obligations, meaning many of the world’s biggest companies pay less tax than most individuals pay.

And now Australians have been given a further insight into the tax dodging of the nation’s biggest private companies, courtesy of information released yesterday by the ATO under tax transparency laws.

Almost 100 companies, earning revenue of $47 billion between them, had no tax payable in 2013-14. This is entirely legal — these companies have used our tax laws, which allow extensive opportunities for profit shifting, to reduce their taxable income.

Last year 59% of voters identified large corporations not paying their share of tax as the thing that bothered them most about our tax system — well ahead of the 23% who said they were bothered by the amount of tax they themselves paid. And that view was remarkably consistent across voting groups and income levels. More than three-quarters of voters think multinational companies should be forced to pay a minimum rate of tax on their Australian earnings.

In contrast, the government appears untroubled by tax avoidance — indeed, it fought tooth and nail to prevent yesterday’s information being released. Australians want a fairer tax system — but the Coalition government isn’t listening. Labor is streets ahead of the Coalition on both the policy and politics of this issue, and it has already outlined plans to require multinational corporations to pay more tax.

If the government proceeds with its plan to hand out windfall tax cuts to corporations in the budget, it should expect a backlash.

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8 comments

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8 thoughts on “Sick to death of tax-dodging companies

  1. graybul

    The Governments position on this issue conflicts with any concept of fairness. Farcical.

  2. Dog's Breakfast

    Plus the recent exposure of the tax paying of a bunch of people who earned over $1m per year, and still paid no tax.

    The man/woman in the street/pub/office/gym is being screwed over big time. I have no doubt that there would be no deficit if we could get companies to pay fair tax.

    And the we can get on to trusts!

  3. David Hand

    Give us details Crikey. The phrase “earning revenue” gives a cynic like me about your campaigning mission that you are calling it profit when it is actually revenue which is not the same. Please clarify.

  4. AR

    As usual OneHand is in hand ..err.. on hand.. to attempt to defend the indefensible. No brain, no shame.
    tax dodging of the nation’s biggest private companies, …100 companies, earning revenue of $47 billion between them, had no tax payable in 2013-14. This is entirely legal …59% of voters identified large corporations not paying their share of tax as the thing that bothered them most about our tax system — well ahead of the 23% who said they were bothered by the amount of tax they themselves paid …the government… fought tooth and nail to prevent yesterday’s information being released.
    Perhaps they were concerned about the families of the tax dodgers being kidnapped?
    Why do we fiddle constantly with tax law when it only complicates matters and provides a sheltered workshop for shysters – scuz the tautology – lobbyists, accountants and lawyers?
    Tax revenue, couldn’t be simpler.
    And no deductions for advertising which would remove the majority of another entirely useless sector from the taxpayers teat.

  5. klewso

    I think you’re wrong. I think this government is troubled by tax avoidance – depending on who’s doing it of course?
    When it’s us plebs … who don’t donate directly …?

  6. CML

    I suppose that is what we can expect from this government.
    They don’t care about the little people, so long as their rich mates and the companies who donate to the LNP are okay.
    Let’s hope the Oz voters wake up and get rid of this lot at the coming election.

  7. Pedantic, Balwyn

    @David hand. Please spare us the tired old yarn about confusing revenue with taxable income. The vast majority of Crikey readers are financially literate. We don’t need pompous suggestions that that we can’t grasp the fact that companies deploy every strategy to apply charges against revenue to reduce their taxable income.

  8. David Hand

    OK Pedantic,
    I may be pompous but I want the question answered. “Earned revenue” is ambiguous.
    Anyway I checked it myself and most media outlets who are a bit more careful than Crikey are calling it revenue. Which is not earnings. Which is not profit.

    As you are financially literate Pedantic you will understand why it’s important to be clear about it.