Tax dodging by Australian-based multinationals through offshore tax havens has cost Australia up to $4.8 billion in 2014, according to a new Oxfam Australia report.
The report claimed that Australia lost $4-4.8 billion in 2014 as a result of tax dodging. It also revealed that the top offshore tax havens used by Australian multinationals are Bermuda, Cayman Islands, Netherlands, Switzerland and Singapore.
The report followed the new data released by the Australian Tax Office (ATO) on Friday, which shows that 36 per cent of large companies, or 679 companies in Australia did not pay any tax in 2014-2015. McDonalds Asia-Pacific, Chevron Australia and Vodafone Hutchison are among the list of large companies that failed to pay tax.
In the report, Oxfam criticised the Federal Government’s plan to cut corporate tax further to 25 per cent in the next ten years.
“There is no winner in the race to the bottom on corporate tax,” said Muheed Jamaldeen, senior economist at Oxfam Australia.
The advocacy group said that tax incentives are ineffective to encourage payment due to the lack of parliamentary and public scrutiny.
“As a result, tax incentives are often ineffective and have become associated with abuse and corruption,” the report said.
“Tax revenues are needed to fund public goods and services, which contribute to the reduction of poverty and to the development of social and economic infrastructure.
“It is crucial that the Australian Government modifies current legislation so that multinational companies that function in or from Australia report publicly on their incomes, employees, profits earned and taxes paid in every country in which they operate.”
Dr Helen Szoke, chief executive at Oxfam Australia said the federal government should take action to make companies “pay their fair share”.
“The Federal Government must act swiftly and can no longer ignore the need for laws that will force big companies to publicly report on their incomes, taxes paid, profits and employees in every country in which they operate,” she said.
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