Business Council of Australia CEO is ‘pretty confident’ of eventual across the board corporate tax cuts.
THERE is a glaring contradiction in the Turnbull Government’s boast it is chasing down billions of dollars in back taxes from corporate giants.
While it is demanding big multinationals pay up, it is also campaigning for them to get tax relief.
The seven corporate heavyweights the Government wants to force into coughing up billions in back taxes are eligible for even bigger tax breaks under the Government’s own policies.
Treasurer Scott Morrison hopes to wring some $3 billion from the likes of Google, Apple, Rio Tinto and BHP to fix the revenue-starved Budget.
But if his corporate tax cuts legislation gets through Parliament, they would be among the biggest beneficiaries.
The windfall would be $4.7 billion, according to calculations by the Australia Institute, based on publicly-available data for 2014-15 tax liabilities provided by the Australian Taxation Office.
Ben Oquist, executive director of the Australia Institute think tank, said moves to reduce corporate tax avoidance were welcome.
“Such gains, though, would be more than offset by further cuts in company tax, particularly for big business,” said Mr Oquist.
“The proposed company tax cuts for big business are like a ticking time bomb, with the revenue loss building significantly over time. This represents intergenerational theft of future funds needed for schools, hospitals and infrastructure.”
If the Government’s cut to corporate tax from 30 per cent to 25 per cent were active in that financial year, their tax bill would fall from $4,714 million to $3,929 million — a gain of $786 million.
Assuming the companies continued to earn enough to generate a tax liability of $4,714 million under the 30 per cent tax rate, then once the tax cuts are fully implemented the savings for those companies would be $7,860 million — almost $8 billion, over a decade.
But the Government’s priority is immediate as it needs the extra revenue to help control rising debt, and the full corporate tax cuts are scheduled for 10 years away.
Revenue Minister Kelly O’Dwyer said yesterday the Government had introduced “the strongest tax laws in the world”.
“And we have given the Australian Taxation Office now the powers and the penalties to be able to go after big multinational companies to make sure that they’re paying the right amount of tax that is owed to the Australian people,” she told Adelaide radio.
“Because at the end of the day, this money that is owed to the Australian people pays for roads, it pays for hospitals, it pays for schools, and we would be derelict in our duty if we didn’t go after every cent of it.”