Tax office not doing punters any favours
- Date
- October 4, 2014 – 12:58AM
Michael West
Heartening to see somebody in Canberra looking after the broader interests of the nation as opposed to the distracting burqa fluff.
Greens leader Christine Milne managed to get two vital senate inquiries going: one into tax evasion by corporations and the other into the “gold plating” of electricity networks, which has been the main driver of rising energy bills.
Inquiry is into corporate tax “evasion” rather than “avoidance”. Avoidance is the legal one, evasion illegal.
The silence from the business lobby has been chilling. All taxpayer segments are being encouraged to deal with the ATO online and – if the ATO’s data analysis indicates that individuals and small business are compliant – they’ll rarely be bothered by the ATO in the future (a ‘light touch’ approach).”
Much is made of the “need to collaborate internationally” to pursue tax reform. No surprise there. They know the G20 efforts to curb tax avoidance should amount to nothing.
No surprise either that the ATO’s “new approach” is lauded by tax professionals.
Were there a peak body for Katie Perry fans, they might steal the institute’s motto nec timens nec favens (without fear or favour). Andrew Bolt stole this for the end of his Bolt Report
Avoidance only becomes evasion if the authorities drag you off to court and win. If they force a settlement, it is secret. So when a company pays little or no tax while claiming it obeys the law, it is likely that the law has simply not been tested.
It was terrific to see Wesfarmers’ chief executive Richard Goyder and Harvey Norman chairman Gerry Harvey speak on the subject this week.
“My personal view is that the tax issue will become a bigger one for companies, and will go directly to their reputation. Norman already operates in Ireland and Singapore, it would be easy for him to dodge tax.
Others such as the head of Google Australia, Maile Carnegie, have decried the media “naming and shaming” corporations on tax. Sadly, naming and shaming is the only thing which works. Without naming and shaming, there would have been no parliamentary inquiry.
In the extraordinary lengths to which they go to avoid tax, aided and abetted by government, Facebook provides a classic case. Although it has a market value of $US200 billion ($228 billion) and sales of $US10 billion-plus, Facebook managed to win an exemption from the corporate regulator in order to class itself as – to quote the exemption, “a small pty company controlled by a foreign coy which is not part of large group”.
What part of $200 billion is not large? The point is that it did that to skive out of having to file consolidated financial statements in which it would have to provide greater disclosures on tax and transactions with its associates offshore.
The failure of transparency and proper disclosure had made it open season for big tax avoiders in this country. We don’t need G20. What we need is more corporate leadership in the mould of Goyder and Harvey and some spine from our political leaders.
olddogthoughts 