Yahoo Finance Aussie government needs to crack down on tax havens: Here’s why
Australian mining companies have been targeted by not-for-profit organisation, Oxfam, for shifting profits out of poverty-stricken countries in a bid to avoid paying taxes.
Oxfam said Australia was a ‘mining superpower’ in Africa, with developing countries in the region hosting 32 of the 88 Australian mines that were in operation between 2016 and 2017.
Also read: Banks caught in 'Panama Papers' tax row
Also read: Aust Taxation Office eyes Paradise Papers
Also read: Loyalty tax: How banks punish you for staying with them
This means Aussie mining companies have a huge impact on African communities in terms of tax contributions, but investigations have revealed those mines have financial and corporate arrangements that may have led to them to pay significantly less tax than they should have.
Oxfam’s report Buried Treasure estimates mining companies shifted a whopping $1.1 billion in profits out of Africa in 2015 alone, and could be responsible for an estimated $289 million in government tax revenues in some of the poorest countries in the world.
According to the report, it’s rare for Aussie mining companies to reveal enough tax data for the public to even understand their full global tax practices.
“Overall, we conservatively estimate that the three mines could have paid $149 million more in corporate income tax than they did over five to seven years across Ghana ($57 million), Democratic Republic of Congo (DRC) ($52 million) and Sierra Leone ($40 million),” the report said.
“A lack of transparency means it is not entirely possible to know if this money was not paid because of aggressive tax practices or due to legitimate deductions on mine costs.”
“However, we do understand that these mines are privy to special or secretive tax arrangements and that each company has subsidiaries located in tax havens, which raises serious questions about their tax practices.”
The report calls on the Australian government to introduce legislation requiring public country-by-country reporting of revenue, profit, tax paid and other payments to government, number of employees and assets by large ASX-listed companies and other major Australian firms.
On top of that, they encourage mining companies to be proactively transparent by annually publishing their data.
And, of course, they recommend mining companies “pay a fair share of tax”.
The Australian Labor Party supported Oxfam’s calls, and asked the Coalition to step up.
“The Coalition cannot ignore the facts any longer,” the ALP said.
“We know that tax havens are used by drug dealers and arms traffickers. We know they are being abused by multinational firms to avoid paying their fair share of tax.”
“It is up to Scott Morrison and Josh Frydenberg to take action. As Oxfam states, ‘it’s time for Australia to become leaders, not laggards’ on tax transparency.”
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.
