Greens release corporate tax policies to raise extra $4.5b per year
WA Today.
November 13, 2021
Large multinational firms would pay up to $4.5 billion more in tax and reveal far more about their inner workings in the Australian market while penalising promoters of tax avoidance schemes under a suite of policies from the Greens.
In a move that together with other policies the Greens admit would increase the tax take on large businesses and high wealth individuals by $391 billion over the coming decade, party leader Adam Bandt will on Saturday declare the “theft” of money by multinationals from Australian taxpayers has to stop.
Greens leader Adam Bandt will announce a series of policies closing loopholes for corporate tax minimisation.
Both major parties have targeted multinational tax in their policies over the past decade following revelations at the time of the global financial crisis of mass avoidance and in some cases evasion of corporate tax.
It is expected to form a part of the efforts of both Labor and the Coalition to repair the budget, which is forecast to show a deficit of more than $100 billion this year. Gross government debt on Friday reached a new record of $857 billion.
In a speech to the Greens national conference, Mr Bandt will outline a string of measures he says will block the ways multinational businesses avoid paying Australian company tax.
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The measures, costed by the independent Parliamentary Budget Office, would reap an additional $4.5 billion in revenue by 2031-32.
“Right now, we’re all being ripped off by multinational corporations who hide their profits in tax havens, shell companies and use accounting tricks to get away with paying their fair share of tax,” he will say.
“We must close the loopholes and stop the cash train departing our country. The tax law might be complicated, but the morality is pretty simple. We’re being robbed and we need to get this cash back.”
Under the Greens’ plans, so-called significant global entities would be denied a tax deduction for royalties for use of intellectual property within Australia.
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This measure, which the budget office warned could prompt companies to restructure their finances to avoid additional tax on royalties, could raise $544 million by 2024-25 and $2.2 billion over the next decade.
The Greens would also restrict access to thin capitalisation rules that affect companies whose assets are funded by a high level of debt. This change would bring in another $2.5 billion over the decade.
Businesses with assets of more than $25 million and revenue of more than $50 million would have to lodge financial reports, and fees to access company information through the Australian Securities and Investments Commission would be abolished.
Mr Bandt said tax deductions for a written-off debt would be abolished where the debtor is a related company.
People promoting tax avoidance schemes would face double the current penalties for their action. Individuals could face fines of $2 million while business could face fines of $11 million.
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Combined with the Greens’ other policies around multinationals and individuals, the party’s policy agenda would raise $391 billion in additional revenue by 2031-32. Total company tax a year is worth about $100 billion.
Mr Bandt said the money would flow back to services.
“People would prefer to have free mental and dental health care rather than billionaire corporations sending massive profits to offshore shareholders,” he will say.
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