It’s no secret that some multinational companies don’t pay their fair share of tax. There are many who have suggested that taking a tougher approach to tax avoidance by these types of businesses would reduce the likelihood of funds having to be raised through cuts to our public services, as well as our health, education and welfare systems.
The government seems to have taken notice, and has committed to strengthening our domestic laws in order to combat tax avoidance.
It aims to do this by:
- establishing a multinational tax avoidance law to restrict the ability of multi national companies escaping the Australian tax net by using complex tax arrangements
- ensuring that GST is applied to digital products such as streaming services, ebooks and digital media purchased from overseas
- increasing the penalties for tax avoidance
- working towards full disclosure of tax affairs of businesses operating in Australia.
The Australian Government is working closely with the UK Government and the OECD on further measures to combat international tax avoidance. It is hoped that this commitment will make multinational businesses more accountable to Australian tax law, and will provide a significant source of funds for the country’s bottom line – money that, by rights, should be here in the first place.
How does this benefit retirees?
It should go without saying that if the government can derive tax revenue from the mass of multinationals trading on our shores, it would, in theory, go some way to addressing the budget deficit. The resulting revenue could be used to improve pensions and health care, to name just a couple of areas that would benefit from a cash injection.