Just days after Treasurer Scott Morrison took the axe to
welfare, family day care, health, and aged care services the Commissioner of
Taxation Chris Jordan AO published the tax details of 1500 large corporate
taxpayers. The report forms part of a much wider domestic and global push for
improved corporate transparency.
The published report is an entity by entity listing of
public and foreign owned corporate entities reporting total income of $100 million
or more in 2013-14. With ASX data showing more than 20 per cent of companies
make an accounting loss in any given year, no tax paid does not necessarily
mean tax avoidance.
In a statement released at the time of the report Commissioner
of Taxation, Chris Jordan AO said;
“I am confident of the ATO’s oversight of these large
players in our economy, and of our ability to keep close watch on the revenue
we receive. Any companies with unusual financial or taxation numbers are
closely investigated by the ATO. Over half of these 1500 companies have been subject
to ATO review or audit over the past three years, with the ATO’s risk and
intelligence systems working all the time to ensure we can all have confidence in
the tax system.”
“Within the OCED only Norway taxes companies more as share
of the economy than Australia,” Jennifer Westacott, Chief Executive Officer of
the Business Council of Australia said in a statement on December 17, 2015.
“The figures,” she added, “should be interpreted with
caution. Companies do not pay company income
tax on revenue, they pay it on profits after paying all expenses
including wages, capital replacements, supplier costs, fleet costs and other
operating expenses.” She said.
“Profit margins will also vary by industry, reflecting
different capital intensities.”
This no doubt makes sense to accountants and tax lawyers, but for the general public it is hard to understand how a company such as Unicharm
Australasia, which owns the Babylove nappies and Be Fresh sanitary products,
had a total income of $130 million, yet paid only $3 on a total taxable income of
$10, while Steinhoff Holdings who is owned through the Netherlands and holds
key brands Freedom Furniture, Snooze, and Buy (Leather Republic) had a total
income of $431 million, but only a taxable income of $150 and paid $0 in tax.
Assistant Treasurer Kelly O’Dwyer told reporters in Melbourne
that “just because they don’t pax, doesn’t mean they are avoiding tax.”
“We have strengthened the powers of the Australian Taxation
Officer, we have doubled the penalties for the people who do the wrong thing
and strengthened Part IVA of the Australian Tax Act,” Ms O’Dwyer said.
According to the ATO report the companies listed have paid a
combined $40 billion in tax in 2014. Given the national total taxation revenue
generated is approximately $67 billion to say all companies are dodging their
taxation obligations would obviously not be fair or true. However, for
companies such as QANTAS, Exxon Mobile Australia, Lend Lease, Virgin Australia,
General Motors, Vodafone Hutchison Australia, Chevron Australia, Peabody Energy,
News Corp, Transfield, Tiger Airways, Infigen Energy and Adani Abbott Point
Terminal to not have any taxable income payable for the 2013-14 period does
reinforce the need for an overhaul of the Corporate Tax laws in Australia and
also shows the importance of companies supported by Australian’s in turn
supporting our country by paying a fair and equitable tax amount.
Mike Cullen has recently returned to Akolade after a period as the
conference producer for one of Australia's leading economic think tanks. Mike
began working in the conference industry in 2007 after looking for a career
change from the high pressured world of inbound customer service. Mike has
worked for some of the most well-known conference and media companies in the
B2B space and in his spare time is working on his first novel in a planned Epic
Fantasy trilogy.
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