Google Tax Plan Welcomed by NFPs
Tuesday, 3rd March 2015 at 9:43 am
Not for Profits have welcomed a proposal by Labor that would see large multinational companies such as Google and Apple forced to pay their fair share in Australian tax.
World Vision CEO, Tim Costello, said the move to crack down on companies that deliberately shrink their tax bill by “shifting” profits offshore was an important step to creating a fairer tax system.
Opposition Leader Bill Shorten announced that Labor would work to standardise tax laws to shut down loopholes that allow some companies to send their profits overseas and avoid paying taxes in Australia.
“How can we ask Australians to work work hard and pay tax if the rules aren’t fair for multinationals too?” Shorten said.
“Last year one of the world’s largest companies paid only $80 million in Australian tax on local revenue of just over $6 billion. This isn’t good enough.”
The example Shorten used is believed to be referencing Apple, although he did not mention the company by name, but he did say that documents leaked in 2014 showed that over 300 Australian firms had been involved in routing money through Luxembourg and other low-tax jurisdictions to minimise their Australian tax bills.
Shorten said firms named in media reports included AMP, Macquarie Group and Lend Lease and the amount of tax avoided through these schemes potentially reaches into billions of dollars.
Costello urged the Abbott Government to adopt a bipartisan approach to making the Australian and global tax systems work better.
“Certain companies are getting a free kick not paying their fair share of tax on the profits they are making in Australia and as a result the tax burden is falling more heavily on the rest of us,” Costello said.
“Australians are keen to see the tax obligations of corporations more closely aligned to their actual activity, and thus less easily manipulated for the benefit of only a few.
“We’ve been saying for a long time that you can’t cut your way to a sustainable budget position and that there is an urgent need to address the revenue side of the budget through real reform especially to our taxation system.”
Describing the proposed reforms as a good chance to harvest some ‘low hanging revenue fruit’, Costello said the Government could start the bipartisan ball rolling by adopting Labor’s proposal to bring forward the start date on improved third party reporting and sharing of data to 1 July 2015.
Costello said by drawing on a broad range of expertise, and committing to further consultation around the best way to implement the proposed changes, the Opposition has signalled a sensible way forward on the vexed issue of tax reform.
“These proposals address some of the complex challenges thrown up by increasing base erosion and profit-shifting, which sees around many billions ‘leak’ from national revenues globally,” he said.
“That represents a huge lost opportunity to provide the basic services necessary to foster healthy, well-educated societies both here but especially in developing countries.”