Australia would become a world leader on tackling the tax dodging by multinationals that is robbing Australia and developing countries of billions of dollars that could be used to fight poverty under a Labor promise unveiled tonight, Oxfam Australia said.
Oxfam Australia Chief Executive Helen Szoke said an announcement in tonight’s Budget Reply that a Federal Labor Government would make large multinationals’ tax affairs public for every country in which they operated was to be applauded.
“Tax dodging is ripping away money that could be used to fight poverty and generate equality – and Australian-based multinationals are part of this problem,” Dr Szoke said.
“Labor’s commitment would make Australia a leader in combatting multinational tax-dodging on a global scale.
“Oxfam has long been calling for public country-by-country reporting to crack down on wealthy multinational companies that are shirking paying their fair share of tax.
“The current Government’s measures requiring large companies to report to the Australian Tax Office do not go far enough. What taxes are being paid by companies in what country – rich or poor – should be transparent to all, so multinationals and governments can be held to account.
“Oxfam estimates that every year, up to AUD $9 billion is being hidden by Australian-based multinationals in tax havens. Australian coffers are being deprived of up to $6 billion, while $3 billion is starved from developing countries. These are billions that could instead be spent on schools, hospitals and essential infrastructure.
“Tax dodging is a global scourge that deprives the public purse of money that governments everywhere should have to invest in the lives and needs of people.”
Dr Szoke said Oxfam research showed that globally, tax dodging was rampant in developing countries, with big companies ripping US $172 billion (AUD $209 billion) of tax revenue out of their economies in 2014.
“Through the use of tax havens alone, Oxfam estimates that over the next five years Papua New Guinea stands to lose about AUD $23 million in spending on services like hospitals, schools and clean sanitation. This is shocking, given 60 per cent of people in PNG don’t have access to clean water. In Ghana, funding lost because of the use of tax havens by Australian-based multinationals could pay for an estimated 1,400 extra primary school teachers, and nearly 600 nurses, a year.”
Dr Szoke said other jurisdictions, including the European Union, France and Canada, had made global tax reporting public for high-risk sectors in big business, such as mining companies and big banks.
“Labor’s announcement tonight will go further by requiring public reporting on all Australian-based companies with a turnover above $1 billion,” Dr Szoke said.
“Oxfam is calling on all political parties to follow Labor’s lead and commit to making tax transparent at home and abroad. This is a first – and achievable – step towards curbing the irresponsible use of tax havens.
“With inequality worsening around the world and making the fight against poverty even harder, companies must pay their fair share of taxes so that revenue can be used to improve people’s lives.”
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