Responding to reports today on multinational tax dodging, Oxfam Australia Chief Executive Dr Helen Szoke said:
“In reports today the Australian Taxation Office (ATO) deputy commissioner Michael Cranston himself acknowledges that the ATO can only go so far in tracking down the tax-dodging big end of town.
“The ATO, with beefed up powers to tackle multinational tax-dodging announced in the Federal Budget, is now saying that what is really needed is for countries to work together.
“Mr Cranston makes an argument for greater transparency of the tax affairs of multinationals – calling for more countries to sign up to country-by-country reporting and stronger beneficiary ownership rules, something Oxfam has been calling for a long time.
“While the new measures to crack down on multinational tax avoidance announced in the Federal Budget are a start, they are not the bold action that’s needed to stop tax-dodging by the wealthiest corporations.
“The Diverted Profits Tax only kicks in if the offshoring of profits reduces tax liability by 20 per cent, which means there’s still room to shift profits overseas. The measures also fall short of full transparency.
The Turnbull Coalition Government needs to ensure that companies make public their information on taxes and profits in the countries in which they operate. Transparency and accountability are what’s needed to prevent the kind of tax abuse revealed in the Panama Papers.
“Billions are stripped from the coffers of both rich and poor countries alike due to multinational tax-dodging – – money that could go on hospitals and schools, both here and overseas. Fairer tax rules are vital to ensure countries don’t continue to be ripped off by a broken tax system.”
Case Study – Malawi
Tax revenue that should be helping to fund public services like healthcare and education in Malawi and other poor countries is disappearing at an alarming rate.
It’s estimated that Africa loses around US $14 billion in tax revenues annually – enough money to pay for healthcare for mothers and children that could save four million children’s lives a year and employ enough teachers to get every African child into school.
In Malawi, it’s impossible to get a full picture of the scale of tax dodging. However, Oxfam calculated that the lost tax revenue from the money revealed to be held by Malawians in HSBC accounts in Geneva in last year’s Swissleaks scandal could pay the salaries of 800 nurses for one year.
Half of Malawi’s 16 million people live in poverty. The health system is seriously under-resourced with shortages of staff and vital medicines. On average there are just three nurses for every 10,000 people. Public spending per primary-school child is among the worlds lowest.
Tax dodging makes the situation even worse for the poorest who have no way to pay for private clinics and schools.
For interviews or more information, please contact Laurelle Keough on 0425 701 801 or firstname.lastname@example.org or Alice Plate on 0418 873 782 or email@example.com