Off-shore corporate tax avoidance – Rort of the 21st Century?

Did we miss something or has the Australian Tax Office grossly downgraded its pursuit of off-shore profiteers and tax-avoiders – the central reason why most governments around the world (even in ‘rich’ countries like Australia) are generally debt-strapped if not effectively bankrupt in many or perhaps even most cases.  [This is also after the recent introduction in Australia of (a) the so-called ‘Google Tax’ to go after multinational corporations playing the sport of ‘tax shifting’ (transferring profits off-shore and debts here to Aust to minimise tax) and (b) related measures to go after the various crooks associated with the Panama Papers (anonymous laundering of money or avoidance of tax)].

A report just out (https://amp.theguardian.com/australia-news/2017/jul/05/corporate-tax-non-compliance-costing-government-25bn-says-commissioner) refers to the ATO trying to recoup $2.5 billion in terms of corporate tax compliance supposedly at 94% (which is clearly too good to be really true).  Even six months ago there were reports in The Daily Telegraph and SMH referring to the ATO going after Rio Tinto, BHP Billitin, Microsoft and Apple as well as Google for just $7 billion in tax avoidance – with further plans to go after Singtel, Crown, Shell, Chevron, Glencore and others for related amounts (just a month ago Chevron was told they owed a billion dollars).

Perhaps the ATO does not really think it will recoup very much of this? But what I would really like to know is what happened to the projections just 18 months ago that perhaps up to $80 billion was lost in corporate tax avoidance in Australia in just the previous two years (2013-2014)? [As ABC News reported at the time (17/12/2015): “ Almost 60% of the top 200 companies in Australia declare subsidiaries in tax havens and many journalists now suggest they are engaging in some form of corporate tax dodging…. Figures released by the Australian Taxation Office (ATO) this morning show more than a third of Australia’s top 1500 corporations did not pay tax in the 2013-14 financial year”. [http://www.abc.net.au/triplej/programs/hack/a-third-of-top-australian-companies-pay-no-tax-ato-figures-show/7038232 ]

 

Since the national government debt skyrocketed past the half-trillion dollars level recently (check out australiandebtclock.com.au), average Australians typically feel the pinch in various ways (including reduced infrastructure spending) – just imagine how Australia (and most other countries) if there was better alignment between private sector profits and public good needs (and a greater percentage of that projected bi-annual $80 billion avoidance was recovered and helped pay for better roads, hospitals, schools, etc. ?

Some related articles

https://www.economist.com/news/finance-and-economics/21618911-big-economies-take-aim-firms-running-circles-around-their-taxmen-transfer [The Economist expose on global ‘corporate tax dodging’]

https://www.cgdev.org/sites/default/files/CGD-policy-paper-69-Forstater-tax-dodging-dev-finance_2.pdf [CGD policy paper on the problem]

http://www.europarl.europa.eu/RegData/etudes/STUD/2017/572717/IPOL_STU%282017%29572717_EN.pdf [link between this and the Panama Papers list of crooked or dodgy companies wilfully evading tax by off-shore profiteering means]

https://theaimn.com/time-come-say-fairs-fair/

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Corporate_Tax_Avoidance/Report%20part%201/c03 [from a Australian govt report]

http://www.smh.com.au/business/joe-hockey-says-tax-cheats-are-thieves-20141009-113heo.html [Sydney Morning Herald focus on Chevron as ‘thieves’]

http://www.abc.net.au/news/2016-12-09/tax-data-transparency-ato/8106178 [ATO’s list of big corporations active in Australia paying zero tax in 2014-2015]

https://www.newyorker.com/news/john-cassidy/apples-tax-dodges-wheres-the-public-outrage [2013 New Yorker article on Apple’s tax avoidance practices]

https://www.theguardian.com/business/gallery/2014/nov/07/12-luxleaks-diagrams-that-will-make-your-head-spin [Guardian article on visual maps of corporate tax avoidance after ‘Luxembourg leaks’]

 

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