The purpose of the tax system is to generate sufficient revenue to provide the services the community expects and deserves of governments and to support a fair society with decent living standards for all. Australia has a progressive tax system but its progressivity is in decline and inequality is widening. The ACTU’s position is that the tax system should support the role of government to provide quality services and investment in high-skilled, high-wage job creation. For this to be reality it is essential corporations must pay their fair share of tax.
Conclusions
In order to address rising inequality and build a decent society it is essential that corporations pay their fair share of tax. Corporations like Exxon who have followed aggressive tax minimistaion policies, paid zero tax in company income taxes for the last three years, have paid less PRRT than their competitors and hide information on their transactions and ownership structures (as highlighted by the Tax Justice Network) need to pay their fair share of tax.
In order to change this bad corporate behavior the ACTU makes the following recommendations;
xx Australia needs mandatory disclosure for Resource companies. Mandatory disclosure reporting would put Australia in line with the other 30 countries that already have this legislation which
provides the public with project by project information on all payments to governments. Australia is currently lagging far behind others, including the United Kingdom, Canada, and the European
Union, in requiring resource companies to disclose their payments to governments in a standardised and public format.
xx The ACTU recommends that a Commonwealth Royalty on offshore projects should be applied to petroleum products of at least 10%. This would generate a minimum additional $4-6 billion in
revenue over the forward estimates.
xx To further increase the transparency of the PRRT, the value and calculation method of wellhead gas should also be made public, and should be reevaluated to ensure the Australian people are
paid a fair price for their natural resources. These prices are calculated behind closed-doors and there is no market to which to compare these.
xx The Government should increase fines for tax evasion and extend laws to effectively cover the full range of corporate tax avoidance strategies.
xx The Government should ensure that the Australian Tax Office is adequately funded and staffed.
xx Restricting the legal use of related-party loans and internal marketing charges.
xx Review all deductions used by these companies and reduce the alowable list to fit with community standards.
xx Make the required changes in law and regulations so these major billion-dollar companies pay at least a minimum percentage age of their revenue.
