With extreme wealth comes the power to influence the rules.
In developed and developing countries alike, the lowest tax rates, the best health and education and the opportunity to influence are being given to the rich and their children.
The vast gap between the few rich and many poor in the world can’t be resolved without deliberate policies aimed at tackling inequality, and too few governments are committed to implementing these – ours included.
The Australian Tax Office estimated the tax gap (tax not paid) by large corporations and businesses in 16-17 was AUD $2 billion. This is the same as the entire National Bushfire Recovery Fund established by the Federal Government in 2020.
When everyone contributes their fair share of tax, we all benefit. Roads are built, children can go to school, and medical care is available to everyone who needs it. But when multinationals don’t pay their fair share of tax, they make it much harder for developing countries to build stronger and healthier communities. Globally, multinationals are stealing USD$172 billion from developing countries every year and Australian companies account for a substantial amount.
In Buried Treasure, Oxfam’s latest report published with the Tax Justice Network and the Uniting Church in Australia, it is estimated that more than $1 billion in profits was shifted out of Africa to tax havens by Australian mining companies in just one year (2015) – equating to up to almost $300 million in tax revenue that could have been used for vital services such as schools and hospitals.
The report also highlights the extent to which the tax affairs of too many of Australia’s mining giants remain cloaked in secrecy. The report shows the majority of Australian mining companies simply do not publish enough tax information for anyone to understand their tax payments and practices around the world.
There is an urgent need for mandatory public tax transparency that would make it clear what taxes these companies pay and where. This shines a spotlight on companies’ affairs and makes it harder for them to avoid paying taxes.