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Co-operation on a rewrite of international tax rules and the introduction of a 15 per cent minimum rate for companies will deliver significant new revenue to countries including Australia, helping stop a global race to the bottom, Canada’s revenue chief says.
Bob Hamilton, commissioner of the Canada Revenue Agency, will visit Sydney next week
Headed to Sydney next week for a major conference on tax administration, Mr Hamilton told The Australian Financial Review the ATO’s single-touch payroll project was guiding Canada’s move to real-time data collection, and that a post-pandemic assessment would show that revenue agencies around the world were critical to fast and effective distribution of government assistance payments.
As chairman of the OECD’s Forum on Tax Administration (FTA), Mr Hamilton will oversee the 20th anniversary meeting, alongside ATO Commissioner Chris Jordan, OECD Secretary-General and former finance minister Mathias Cormann, and outgoing OECD tax chief Pascal Saint-Amans.
Mr Hamilton said a good solution was in sight, despite earlier deadlines being missed, including because of political speed bumps and the COVID-19 pandemic. By some estimates, Australia could stand to gain as much as $3 billion in extra tax revenue per year.
“I think overall, there would be an expectation of significant revenues,” Mr Hamilton said.
“We shall see how the time frames evolve.
“I think people working on this knew that it was going to be a very big challenge, in the time frames. I continue to focus a little bit more on the question of is it on the right path? Is it heading towards a good solution? I think that it is.”
The 15th FTA plenary meeting, scheduled to start on Wednesday, will be the first in-person talks since 2019.
The agenda includes discussions about major tax administration issues around the world, progress on the two-pillar reforms, the post-pandemic tax landscape, global transparency measures and digital transformation.
Mr Hamilton said the work of the FTA had improved information exchanges between like-minded countries, including sharing of data on multinational corporations. Canada’s e-invoicing project is in part based on the ATO’s single-touch payroll system, boosting real-time data collection which can be used across government and ease regulatory burdens on firms.
“If you think back to the pandemic, and some of the benefits that were put in place, like wage subsidies, having that kind of more current data rather than getting it down the road and maybe not an electronic format, would help us as we’re trying to deliver benefits or as we’re designing policy,” Mr Hamilton said.
“Certainly my colleagues in other departments would be looking to use that better payroll information to help us design programs, and maybe look at reducing the burden on some of the businesses that are out there that have to report the same sort of information to different government agencies.”
The Albanese government has factored the global reform project into its economic plans. In addition to the tax floor, the plan would better tax multinationals including online giants including Google and Meta.
Labor expects to raise $1.89 billion over the forward estimates period by limiting debt-related deductions by multinationals at 30 per cent of profits, while maintaining the arm’s length test and the worldwide gearing ratio.
Treasurer Jim Chalmers and Finance Minister Katy Gallagher did not put a figure on the cash benefit of the OECD process before the May election.
Mr Hamilton said the Joint Chiefs of Global Tax Enforcement, a group known as the J5 and including authorities in Canada, the US, UK, the Netherlands and Australia, was catching illicit activity around the world.
Australia is also part of the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration.
“Business is still good,” he said. “We still have lots of work to do and a lot to investigate.”
John Kehoe is Economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at email@example.com
View the welcome message from Bob Hamilton, FTA Chair and Chris Jordan, FTA Vice-Chair and host of the FTA Plenary 2022.
The OECD’s Tax Administration 3.0 is our vision for 2030, where seamless, integrated, and automated systems allow data to flow from the systems taxpayers already use, to ours, without any extra effort or intervention from them.
To put this in perspective, let me explain the three iterations of tax administration.
Interview between Pascal Saint-Amans (Director, OECD Centre for Tax Policy and Administration), Bob Hamilton (Chair, OECD Forum on Tax Administration) and Jérôme Fournel (Directeur general, Direction générale des Finances publiques) – March 2022
Charles Rettig told Janczewski that the case was “this generation’s Al Capone”—perhaps the highest compliment that can be bestowed within IRS-CI, where the story of Capone’s takedown for tax evasion holds almost mythical status.