Sydney : Ten companies are paying 45% of all corporate tax in Australia, demonstrating how reliant the federal government is on the fortunes of the big banks, miners and supermarket giants.
The tax office has released its fourth tax transparency report, revealing key details of 2,109 of the largest companies with operations in Australia for the 2016-17 financial year.
Corporate tax increased by 20% between 2015-16 and 2016-17, rising $7.5bn to $45.7bn, driven by surging commodity prices.
The big four banks (Commonwealth Bank, Westpac, NAB, and ANZ), two biggest miners (BHP Billiton, Rio Tinto), two supermarket giants (Wesfarmers, Woolworths), and Telstra and AMP Limited paid a combined $20.8bn in corporate tax in 2016-17 – representing 45% of all corporate tax paid in Australia. Australian Tax Office contractors accused of links to tax havens But the report has kicked off another debate about tax transparency and avoidance.
The data shows 722 of the largest corporations paid no corporate tax in Australia in 2016-17, including 100 firms that reported more than $1bn in total income.
Civil society groups say it is a clear sign the tax system needs an overhaul. Oxfam Australia has pointed out that 281 companies, including Adani for its Abbot Point Terminal and ExxonMobil Australia, have not paid a cent of corporate tax since 2014-15.
However, the tax office says the tax compliance rate among Australia’s largest companies has been improving, and it is now roughly 95%, and companies that undertake aggressive tax planning are being closely monitored.
It says sensitivity to economic conditions, reinvestment into the business, distribution of profits to other entities within the broader group, tax deductions and tax offsets can all affect the amount of taxable income and tax payable in a single year.
For instance, 251 entities reported a taxable income in 2016-17 but prior-year losses were available to deduct against that profit, so no tax was payable.
