Newly released ATO figures indicate that big business has avoided tax for the fourth year in a row.
Big business: Legally avoiding tax the Australian way
Big business: Legally avoiding tax the Australian way
More specifically, according to the ATO '2016-17 Report of Entity Tax Information', 722 big businesses paidno income tax in Australia in 2016/17.
Who are we talking about?
As the ATO indicates:
The corporate tax transparency population includes:
- Australian public and foreign-owned entities with total income of $100 million or more
- Australian-owned resident private entities with total income of $200 million or more
- entities that have petroleum resource rent tax (PRRT) payable.
There were 2,109 entities covered by the report: 1,721 public and foreign-ownedcompanies, 388 private companies and 14 paying PRRT. Collectively, they paid $45.7 billion in company tax — an increase of $7.5 billion or 19.6% over the previous income year. Most of this increase, $5.7 billion, came from the mining, energy and water sector, and was, in the main, the result of higher resource prices. However, the amount of tax paid by that sector, although more than the two previous financial years, was still less than it paid in 2013/14.
Despite Second Commissioner of Taxation Jeremy Hirschhorn warning ‘against focusing on the number of entities that paid either no tax or a small amount of tax relative to gross income’, we will focus on this here, because paying tax is a class issue.
Workers have little wiggle room when it comes to paying tax. Companies – especially big companies with cross-border activities – have the ability to manipulate their circumstances to avoid tax. Also, it is not workers but the state which makes, administers and enforces the tax laws. Those laws reflect thegrundnorm of capitalism — profit.
This means that even if the tax gap between what companies pay in tax and what they should pay is low – at about 4.4% of tax paid, or $1.8 billion in 2015-16 as the ATO claims, or high, as others have argued and up to $8 or $9 billion – the system is designed by the lackeys of those who have an interest as a class in not paying tax, or in paying as little as possible. The argument that companies "pay all the tax as legally required" fails to address the question of why the tax system is rigged in their favour.
