The Australian Taxation Office (ATO) has stated that one in three privately-owned businesses in the country paid no tax during 2013/14. It made these observations after releasing a list of more than 300 Australian owned private businesses with an income of $200 million or more.
The list showed that 98 companies paid no tax while the other 123 only paid one-third of their eligible tax.
“While most do the right thing, we closely investigate any companies with unusual financial or taxation numbers,” Australian Tax Commissioner Chris Jordan said.
The report also said more than half of the companies in the list had interaction with ATO in understanding their tax concerns, reports Herald Sun.
The ATO noted that not paying tax does not mean they are tax-dodging businesses. It added that wealthy Australians have made substantial contribution to the nation’s economy.
“The 321 companies included today reported income tax payable of around $2bn in 2013-14, with an additional $1.6bn reported by their associated entities,” it said.
“As with the December report relating to large public and foreign-owned corporates, there are some taxpayers with nil tax payable for the reporting period. No tax paid does not necessarily mean tax avoidance,” ATO said.
Michael Croker, taxation expert said the under-reporting could be due to carry forward losses, or the tax-free treatment of dividends coming from offshore subsidiaries.
Commenting on the issue, Labor Party’s Shadow Assistant Treasurer Andrew Leigh said the revelations assume importance at a time Turnbull government was mulling over the corporate tax rate cut.
“It says everything about Malcolm Turnbull’s priorities that he would put company tax cuts at the centre of his budget, even as so many big firms appear to be dodging their fair share,” he noted.
Oxfam Australia also said it is alarming that Turnbull government is considering a cut in corporate tax when companies are not paying their fair share of taxes.
“The cost is being borne by ordinary people … who rely on public services that simply are not funded when there is not enough in federal budgets,” Oxfam’s finance development manager Joy Kyriaco said in a statement.
The ATO list has Forbe’s lister Gina Rinehart’s Hancock Prospecting as the largest taxpayer, having paid $466 millon on a taxable income of $1.5 billion in 2015, reports The Guardian.