Hundreds of bigger firms paying no tax in Australia

Govt vows to keep targeting loopholes

SYDNEY, Dec 17, (AFP): Some 600 of the biggest firms operating in Australia, including Qantas and Glencore, paid no income tax in the 2013-14 financial year, data showed Thursday as the government vowed to keep targeting loopholes.

There has been a global push, including in Australia, for large local and multinational companies to stop using sophisticated structures to avoid or lower their tax payments, which has seen governments lose billions in revenue.

The tax details of around 1,500 large corporations were released by the Australian Taxation Office as a “step forward in improving corporate tax transparency”, its Commissioner Chris Jordan said in a statement.

Warned

While Jordan said companies that did not incur a tax bill were not necessarily avoiding payments, he warned multinational firms -- some of which fronted a parliamentary inquiry this year on tax minimisation -- that their “aggressive arrangements” would be scrutinised.

“Some of these foreign-owned companies are overly aggressive in the way they structure their operations,” he said.

“We will continue to challenge the more aggressive arrangements to show that we are resolute about ensuring companies are not unreasonably playing on the edge. If they do, they can expect to be challenged.”

Britain in March introduced a socalled “Google tax” on firms that divert

The approval will pave the way for the signing of the budget bill into law by Aquino before the end of the year.

The budget will fund a 29 percent increase in infrastructure spending to help the economy sustain a 7-8 percent growth trajectory and fast track government spending.

“We are happy to hear of Congress’ ratification of the 3.002 trillion peso 2016 national budget,” Aquino’s budget secretary Florencio Abad said in a statement, adding the spending will create greater inclusive growth.

Manila aims to increase infrastructure outlay to 5 percent of gross domestic product (GDP) next year, from a target of 4 percent in 2015.

The government is under pressure to accelerate spending to prevent the economy from losing momentum. The exportreliant economy grew an annual 6 percent in the third quarter but is likely to pick up pace in the fourth quarter, underpinned by public spending. Aquino is also spending a record 25 billion pesos ($528.3 million) next year to purchase frigates, surveillance planes and radars to improve its capacity to guard its maritime borders.

Countries bordering the South China Sea have been increasing defence spending this year, said a report from IHS Jane’s, predicting total regional spending is expected to reach $533 billion annually from $435 billion in 2015.

“Rising tensions in Asia Pacific have seen a long overdue process of military modernisation move up the political agenda in a number of countries,” said Craig Caffrey, principal analyst at IHS.

The Philippines has challenged China’s nine-dash-line claim on the South China Sea in the arbitral court in The Hague and is expecting a favourable decision next year. Brunei, Malaysia, Taiwan and Vietnam also have claims on the sea, where about $5 trillion in seaborne goods passes annually. profits overseas, while Australia recently passed a law to lift transparency requirements that would also see disclosures required for private companies with turnover of Aus$200 million (US$144 million).

The data showed that Apple raked in Aus$6.2 billion in total income in Australia for the 2013-14 year, but only had a taxable income of Aus$247.4 million and a tax bill of Aus$74.1 million.

Swiss commodity giant Glencore booked combined revenue of some Aus$17.4 billion for the same period for three reporting entities, but paid no tax for any of them.

Likewise, Australian carrier Qantas and oil and gas company ExxonMobil Australia were among other household names that made billions in total income but paid no tax for 2013-14. Loopholes Assistant Treasurer Kelly O’Dwyer said Australia had worked with the G20 and Organisation for Economic Cooperation and Development to close the tax loopholes of multinationals, and had strengthened the powers of the ATO.

“It is critically important that multinational... companies are paying their fair share of tax and that’s why the government has been very quick to lead this debate through the G20,” she told reporters Thursday.

Opposition Labor senator Sam Dastyari, who chaired the tax inquiry, said the data supported the need for “tougher laws to crack down on this type of behaviour”.