Budget 2016/17: Crackdown on multinational tax avoidance

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The Government continues to attempt a tough stance on corporate tax avoidance and, following last year’s introduction of its Multinational Anti Avoidance Law (MAAL), this year the Turnbull Government plans to establish a new Tax Avoidance Taskforce (TAL) to crackdown on multinational tax avoidance and add revenue that is rightfully ours.

The Australian Tax Office (ATO) will receive $679 million over the next four years to help set up the taskforce, which will be accountable to the Government and have an aim to enforce the correct payment of tax by multinational and private companies, as well as other high-wealth earners. The taskforce is expected to raise over $3.7 billion in revenue by 2020.

The Government’s Tax Integrity Package will also see the introduction of new taxes aimed at multinationals that divert profits from Australia. This measure hopes to gain around $200 million by 2020.

The facets of the Tax Integrity Package include enhanced protection for whistle blowers, improving transfer pricing rules and increasing penalties for global companies that fail to adhere to tax disclosure obligations.

Over the next four years, the MAAL and the Diverted Profits Tax are expected to raise around $650 million – money that will be put towards services needed by all Australians.

What does this mean for you?
Companies (that already should be) paying the correct amount of tax means the Government doesn’t have to seek compensation from those who can least afford it. After all, it’s only fair that public and private entities that profit on our shores pay the taxes rightfully owed to our nation.

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Written by Leon Della Bosca

10 Comments

Total Comments: 10
  1. 0
    0

    About time Governments cracked down on Corporate tax cheats

  2. 0
    0

    Will this be a bottom up or top down
    Most lower tax payers are dealt serverly and swiftly.
    I hope it is the same as “Annus Horribilis”

  3. 0
    0

    Great to hear…wonder why Labor would not agree to it when in office?

    • 0
      0

      I don’t know Rad, but I haven’t stopped wondering about that myself. Labor was against the reporting of party donations being made public as well. I want to know why we don’t have mandatory incorporation of Unions?

    • 0
      0

      You don’t bite the hands that feed you 😉

  4. 0
    0

    Sounds good and not overdue.
    The only concern I hold is WHAT LEGISLATION HAS THE GOVERNMENT CHANGED? If the answer is nil then why would the tax avoidance end?
    The recent senate enquiry into multinational tax avoidance saw CEO after CEO state that their companies were not doing anything wrong and they were obeying all mandatory laws. If this is correct then there is a loophole in the Tax Act. Logically, this new policy will not be worth the paper it is written on if the Tax Act still has outs. Just like finger shaking at the big banks will not stop banking fraud.
    I am uneasy as it is looking like will be business as usual as well as the next election campaign built on deceit. So where is the media in all of this to delve into the facts?

    • 0
      0

      I have seen figures suggesting that multinationals are not paying around $40 billion in tax per year. If this is the case than a return of $3.7 billion over the next 4 years for an outlay of $679 million is pretty poor in my opinion. If I had proposed a return like that to my employers when I was working than I would not have had that job for very long.

      But perhaps as a retiree I now don’t understand business and how economies work.

  5. 0
    0

    You’re right Mick.If tax avoidance is still legal, what can any law enforcement agency do about it?

    • 0
      0

      Joe Hockey was working on a new reporting system in partnership with several other countries. This coupled with some staff changes and upskilling in the ATO with strong management. Well anything is possible when you have the desire.

  6. 0
    0

    To get multinationals to pay the correct tax on Australian earnings (profit, not revenue), we need to have changes to the Income Tax Act. I studied the Tax Act in 1979/80, and we found loopholes in the legislation. These loopholes have been used by companies to avoid tax. Until the Tax Act is changed, these loopholes will be used legally. Unfortunately, when some loopholes were legislated on to close them, the wording on a lot of them actually created more. As a class we saw the need for a complete rewrite of the Act, instead of ad hoc changes, making it more and more cumbersome.


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