You may have seen Michael West Media’s annual Top 40 Tax Dodgers this week which was alarming enough.
We at Auspoll Bulletin have been keeping our own records based on the ATO’s Corporate Entity Tax reporting which as MWM said, has seen 9 annual reports so far.
We did our own analysis over the last 3 reports for 2019-20, 2020-21 and 2021-22. Our comparison summary is shown as a table at the foot of this post.
Some key observations from that table are:
1. Over 30% of reporting entities are paying zero corporate tax in Australia
2. The entities who pay the highest tax are regularly BHPand Rio Tinto. CBA and FMG (Fortescue) make up the top four.
3. The total tax paid is regularly around 23-24% of the total taxable income.
4. When tax paid is assessed against total income, the % tax paid drops to a measly 3% roughly!
Now, where the ATO and Dr Jim need to focus some major attention is to how to drastically reduce the amount of tax being avoided by the corporate entities who pay zero tax. Whilst our Top 40 table shows over 800 entities a year failing to pay any tax, what it does not show is the total taxable income associated with those companies. One of the problems with the ATO data is that if entities pay no tax, the majority of them do not report their taxable income implying it is zero.
We are then left with total income only to assess possible lost tax amounts.
For the 2021-22 tax year, of the 850 entities reporting having paid zero tax, 694 supplied no taxable income figures.
But when we look at their disclosed total income, or earnings/profits, the total is staggering! $413,092,061,441 just for the top 40 dodgers!
That’s $413 BILLION ! Just for 40 companies out of the 850 paying NO tax.
In our table of tax dodgers below, we have highlighted just a few of the most obvious and repeat offenders. MWM highlighted more in their report and YouTube video. Particularly galling is AGL Energy Ltd when you consider the massive increases we have all had to endure for gas and electricity!
The challenge is there for our Treasurer and the ATO. Before he goes keeping stupid promises about stage 3 tax cuts, perhaps he should spend some time with Katy and the ATO boss and see what they can come up with. Surely there are ways of recovering tax regardless of how the companies are structured or where they are based.
The most logical source of increased corporate income is by way of a ‘production tax’ based on turnover or in the case of primary resources, on annual production figures. After all, why should anyone else benefit from our natural resources. It is ludicrous. Just look at the total turnover and ignore the taxable income percentage of around 23%.
All reporting entities in 2021-22 reported a grand total of $2,654,252,087,952. That’s $2,654 BILLION!
Remember , every billion the Treasurer can produce will be useful when battling cost of living and housing issues!
GB / AB