news Shadow Assistant Treasurer Andrew Leigh has slammed Prime Minister Malcolm Turnbull’s record on tackling multinational tax avoidance, following a massive leak of documents from a Panamanian legal firm.
The trove of around 11 million documents from law firm Mossack Fonseca, has revealed to the world the lengths some companies and individuals will go to to avoid paying taxes.
Global technology vendors such as Google and Apple are currently being targeted by the Australian Taxation Office for their tax practices, which have seen them pay very little direct corporate tax in Australia, despite raking in huge revenues locally. However, it is not believed that many technology firms have been named as part of the Mossack Fonseca leak.
The Labor MP said in a statement that a recent ABC report, titled The Panama Papers, has left Australians wondering if and when the government will “get serious” about tackling tax avoidance.
Leigh also said it has been reported that the Australian Tax Office (ATO) is investigating “more than 800 high net worth Australian individuals”.
“Last night, more details about the legal twists, turns and loopholes multinational companies and individuals use to avoid tax have emerged,” Leigh said, adding that “several large companies” operating in Australia are alleged to use the services of the firm at the centre of the leak
The leak of law firm Mossack Fonseca’s documents reveals some of the extraordinary lengths large companies will go to in order to avoid paying tax, he said, yet “Not one Coalition MP appeared on the program. Not even to rhetorically condemn tax avoidance.”
The use of ‘shell companies’ to hide identities, tax havens and money laundering are just some of the techniques employed to avoid paying tax, he pointed out.
Leigh suggested the Turnbull government had demonstrated “a willingness to go soft on tax avoidance by individuals and companies”, including “gutting” the ATO by cutting 4,700 jobs and reducing its investigative and enforcement capabilities.
If the government is “serious” about tax avoidance, he said, it should adopt Labor’s multinational tax avoidance measures that would close loopholes and force large companies to pay their “fair share”. This could bring in $7.2bn in taxes, he suggested.
Government should further adopt Labor’s Private Members Bill, introduced to Parliament in February, that significantly raises penalties for companies that fail to comply with Australia’s country-by-country reporting laws.
Finally, it should lower the public tax reporting threshold for large private companies from $200m to $100m, Leigh said.
Image credit: Parliamentary Broadcasting
TunrCoat wont do anything because then he and his big biz mates would actually have to start paying tax or pay more tax and that will lead to less political donations in an election year.
Instead he’ll continue to rip billions of dollars in funding from education, health and attack those who are battling poverty and general hardships!
Neither 2X nor Shorty will do anything meaningful.
I understand that “Previous behaviour is no guide to future behaviour” but leopards don’t easily change their spots. Our parliaments are too scared of the power that money has, so all we can expect is a touch-up on the lippy.
The ALP have done more that the Libs will ever do on this, mainly because their revenue is less dependent on corporate donations.
The only reason we have any transparency on corporate tax dodging is because of the ALP/Greens when last in power.
And most of that was because of the Greens wasn’t it?
I honestly can’t recall.
To be fair to Turnbull, this isnt something thats easily solved. Its not just going to be something us as a country is going to fix with a magic bandaid, because there are hundreds of international tax treaties getting in the way, and not just between us and another country.
To put it a different way, if it was easy to fix, it would have been fixed before.
Everything they are doing is smoke and mirrors, intended to make it appear they are doing something about it. Fast forward 5 years, and you’ll find the same parties paying the same tax. Maybe in different jurisdictions, but it fundamentally wont change.
To give you an idea, New Zealand has a law where offshore earnings arent taxed in New Zealand, but in the country they are earned. Straight up legal loophole right there. And who are we to tell them to change those laws?
Similarly, a lot of other countries look at some of our laws and consider them just as dodgy. Would we change them just because the UK demanded it?
Turnbull’s got his own shell companies overseas. Perfectly legal according to him. That’s the scandal right there. How the f*ck are these shenanigans legal?
Because in a global world you need global laws. No one wants to live under a global government, so there are no global laws. Those with the means exploit this failing for all it’s worth.
There is only one equitable solution to countries wishing to capture tax on domestic transactions, and that is to impose a small (as in something like 0.01%) tax on every domestic transaction, remove physical currency and ensure that domestic operators must do all transactions domestically. Then convert the taxation department into the Department of Audit and task them with investigating money trails and ensuring compliance. Some models predict we would have 50% more income to the government while reducing individual taxation down to almost zero, which would be a massive stimulus to the economy.
But the fact remains that domestic laws will never be capable of capturing global money movements – only a legal requirement for all domestic operations to be domestically taxed irrespective of international operation or transfer pricing can hope to address this issue.
Yeah, I mentioned this elsewhere. Theres a concept called debits tax that basically taxes every financial transaction at both ends. Just a small amount, I think it was 05%, but the sheer volume of transactions meant enough was collected enough to do away with every other tax.
So, someone puts $100 into your bank account. It gets hit when they transfer it, when it hits your account, and when you withdraw it – you lose a total of $1.50. Then its someone elses problem with the cycle continuing.
For the normal person, you dont usually use your bank account THAT much, but when you get to corporate levels, the number (and size) of transactions is enormous.
Not really condoning it, the guys pushing it at the time seemed a bunch of whackos, but it would go some way to hitting the offshore diverting of funds. Not a big amount, but something. And the concept HAS sorta grown on me over the years, particularly as we’ve gone more global, and become more digitised.
As an FYI, there used to be a debits tax at the state level, though it was far more limited (cheque accts only from memory), that was done away with when GST came in. So its not really a new concept.
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