If the largest Australian listed companies paid taxes at the statutory corporate tax rate of 30%, it would produce an additional $8.4 billion in annual revenues. This would eliminate the need for educational, health and welfare cutbacks.
We need to pay tax. Taxes help pay for for infrastructure and services that the community needs. However, some of us aren't pulling our weight when it comes to paying tax. Over the last 5 years, the proportion of income tax from business shrank from 23% to 19%, while the proportion from individuals rose from 37% to 39%. [1] So ordinary workers have more share of the tax burden, while business is paying less.
But wait, aren't we constantly being told that there is a "Budget Crisis" and the government has to control spending. It's University students, doll bludgers, pensioners, asylum seekers and the health system's fault that there is such a large budget deficit. Australia doesn't have a spending problem, it has a revenue problem. The government is pointing the finger of blame at the most needy in our society while big business fat cats are getting away with legally exploiting tax loopholes that their mates in government conveniently leave open for them. Companies use Secrecy jurisdictions to avoid paying tax Secrecy jurisdictions such as, Singapore or Hong Kong, play a key role in multinational corporate tax dodging. They undermine the ability of governments to levy taxes in a just and fair way. Secrecy jurisdictions provide loopholes for the wealthiest to avoid paying their fair share of tax.
Here are just three examples of tax dodging 2004-2013. [2]
- Bunnings, average annual pre tax profit $51 million. Average ETR 0%
- James Hardie, average annual pre tax profit $203.6 million. Average ETR 0%
- Westfield Retail Trust, average annual pre tax profit $535 million, Average ETR 0%
Effective Tax Rate (ETR)
According to the United Voice and the Tax Justice Network this is how you fix the problem.
Disclosure and transparency of corporate tax practices needs to be increased. Greater public awareness of gressive tax avoidance will provide an incentive to Australian corporations to be less tax aggressive. Tax dodging practices, when exposed, will damage corporate reputations and may increase regulatory and financial risks. Responsible companies should not wait for inevitable changes to the rules before deciding to act.
The Australian government needs to stop blaming the people that need their help the most for the budget shortfall and target Corporations, close the loopholes and make them pay their fair share of tax, 30%. Nothing more nothing less. Another $8.4 Billion will eliminate the need for budget cuts.
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[1] AUSTRALIAN BUREAU OF STATISTICS (2007-08 to 2012-13) Cat. No. 5506.0
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