Tax grift taking billions
New investigations have shown just how much money Australia’s biggest companies are avoiding paying in tax.
The Tax Justice Network - an international group that highlights tax avoidance - and the Australian United Voice union has found that around a third of companies listed on the local stock exchange are paying less than 10 per cent in corporate tax.
The corporate tax rate is 30 per cent, a rate that less than 20 per cent of Australian companies pay.
While the Federal Government trims health, education, environmental and welfare spending to ‘fix’ the budget, big corporations are getting away with billions of dollars owed to Australians.
The report found around $80 billion in tax was forgone in the period from 2004 to now, and amount that would alleviate most of the past two budget deficits.
Some companies such as James Hardie and Westfield Retail Trust manage to pay zero tax, while the effective tax rate of others is actually negative.
Rupert Murdoch's 21st Century Fox pays 1 per cent tax and casino group Echo Entertainment pays 5 per cent tax.
The tax study has been put together ahead of the G20 summit in Brisbane in November, where a global assault on tax avoidance is on the agenda.
“Tackling corporate tax avoidance is an urgent priority; Australia does not have a spending problem, it has a revenue problem and it must be fixed,” says the report - Who Pays for Our Common Wealth?
The study says the classic practice of using subsidiaries in tax havens and so-called “thin capitalisation” - heaping huge debts on local entities to reduce tax liabilities – remain the key methods used to funnel profit out of the country.
About 60 per cent of ASX top 200 companies have declared their subsidiaries in tax havens.
Global broadcaster 21st Century Fox has 117 overseas subsidiaries to move money through, while logistics firm Toll Holdings counts 72 in low-tax jurisdictions.
Tax Justice put together the following table to display its findings.