Disadvantaged Missing Out on $9B from Multinational Tax Dodging
9 June 2016 at 1:46 pm
Almost $9 billion that could be spent on essential public services in Australia, as well as on foreign aid, is being hidden by Australian-based multinational organisations in tax havens, according to an Oxfam report.
The Hidden Billions – How tax havens impact lives at home and abroad, which uses the latest data from the International Monetary Fund (IMF), found tax haven use by Australian-based multinationals cost the country around $6 billion in lost tax revenue annually, and cost developing countries an estimated $2.8 billion every year.
Oxfam Australia Chief Executive Dr Helen Szoke said the report, released Thursday, showed how schools, hospitals and disadvantaged people in Australia and internationally lose out when big companies dodge tax without government intervention.
“The Oxfam report, for the first time, puts dollar figures on what Australians and poor people in our region are missing out on because Australian-based multinational companies aren’t paying their fair share of tax like the rest of us,” Dr Szoke said.
“It doesn’t have to be this way. Australia should show that it’s tackling this issue by making the tax affairs of Australian-based multinationals public – not only for their operations in Australia, but for every country in which they operate.
“Our research relies on IMF data, which shows the flow of money from Australian-based multinationals. Unfortunately, there is no way to find out which individual companies are dodging tax, as they’re not required to publish their tax affairs on a country-by-country basis.”
The report was launched in conjunction with an online poll of more than 1,000 Australians that found 90 per cent of people think the government should do more to stop multinational corporations avoiding paying tax.
“Other countries, including the US, France and Canada, have made tax reporting public for high-risk sectors in big business, such as for mining companies and big banks – it’s time Australia caught up,” Dr Szoke said.
Of those polled, 60 per cent also believed the federal government should raise revenue primarily through cracking down on tax avoidance by multinationals.
A further 87 per cent said that Australian companies should publicly report their earnings and how much tax they pay everywhere.
The report said Australia was a major part of the global problem, with the use of tax havens overseas by Australian-based businesses impacting some of the world’s poorest countries.
“Over the next five years, it’s estimated that Indonesia will be deprived of around $493 million that could have gone towards education, and PNG stands to lose around $23 million in expenditure on essential services such as hospitals, schools and sanitation,” Dr Szoke said.
“This is shocking, given in PNG, 60 per cent of the population don’t have access to clean water.
“In Ghana, funding lost due to the use of tax havens by Australian-based multinationals could pay for an estimated additional 1,400 primary school teachers, and nearly 600 nurses, a year. In the Philippines, an estimated 1,700 new classrooms per year could be built.
“With inequality worsening around the world, making the fight against poverty even harder, companies must pay their fair share of taxes, so that the revenue can be used to improve people’s lives, both here and for the world’s poorest people.”
Oxfam called on all political parties to commit to make tax reporting transparent, make multinational ownership information public, support developing countries with tax infrastructure and support global action to end tax dodging.