Oxfam: End race to bottom on tax cuts

Australia is losing more than $4 billion a year through Australian-based multinationals dodging their taxes by using coroprate tax havens, Oxfam Australia says.

In new research it names the “world’s worst tax havens” that encourage multinationals to avoid their taxes, revenue that could be spent on schools, hospitals and tackling poverty.

While it said the Australian government has taken steps in the right direction, data released on Friday by the Australian Taxation Office showing more than one in three large companies are paying no tax is evidence more needs to be done.

However, releasing the ATO’s corporate tax transparency 2015/16 report, tax commissioner Chris Jordan clarified that no tax paid does not necessarily mean tax avoidance.

Jordan said, “These companies may have incurred an accounting and tax loss in the current year or in prior years, and are now using those to reduce current taxable income.”

“There is no winner in this race to the bottom on corporate tax,” Oxfam Australia senior economist Muheed Jamaldeen said releasing the research on Monday.

“The Australian government has a responsibility to join efforts to stop this race to the bottom on corporate tax rates and demand that companies pay their fair share – at home and abroad.”

Oxfam notes the average corporate tax rate across G20 countries was 40 per cent 25 years ago.

Today it is less than 30 per cent.

The Turnbull government continues to pursue its $50 billion 10-year plan to incrementally lower Australia’s corporate tax rate from 30 per cent to 25 per cent.

AAP

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