Hundreds of big firms paid no tax in 2021-22
Poppy Johnston |
Australia recorded its highest company tax take in eight years as the economy bounced back from the pandemic but more than 800 big firms did not pay any.
A total of 831 large corporates – a third of the 2713 tracked in the annual Australian Taxation Office tax transparency report – paid nothing in the 2021-22 financial year.
ATO deputy commissioner Rebecca Saint said this did not necessarily mean they weren’t doing the right thing.
Tax is paid on profit, not gross income, and there are many reasons companies with large revenue streams don’t make a profit.
“The Australian community can be assured we pay close attention to those who pay no income tax to ensure that they are not trying to game the system,” Ms Saint said.
Assistant Minister for Competition, Charities and Treasury Andrew Leigh also said there were legitimate reasons for paying no tax but worried multinational firms were lightening their tax burdens via avenues not available to smaller Australian businesses.
The federal government has embarked on a crackdown on multinational tax avoidance, with legislation introduced to parliament earlier in the year.
“When you look at some of the academic evidence, so the growth in the share of profits flowing through to tax havens, low tax jurisdictions, it is significant cause for concern,” Dr Leigh told reporters on Thursday.
He said the ATO’s report and other measures to enhance transparency were key to understanding how much tax multinationals were paying relative to their activities.
“Sunlight is the best disinfectant,” he said.
Most large companies did pay tax that year, to the tune of $83.8 billion – the largest total sum in the eight years the ATO has been tracking corporate tax in this way.
Big corporate tax payers recovered strongly from the pandemic, helped along by monetary stimulus and strong consumer demand.
Sky-high commodity prices also showed up in a record tax take, with the mining, energy and water category accounting for roughly half the total tax paid, or $42.4 billion.
“‘The 2022 income year was the first year that the mining sector paid more tax than all other sectors combined,” Ms Saint said.AAP