Making tax vanish in Australia: Oxfam report

Campaigns and Advocacy, General, Media Releases, News article written on the 13 Jul 2017

Oxfam research that has prompted a global multinational company to publicly back the push for tougher tax laws has again exposed the broken tax system robbing Australia and poor countries of billions, Oxfam Australia said today.

The Oxfam research, published today, examines restructures by multinational RB that appear to have allowed the company to avoid paying around $365 million in taxes globally over three years from 2014 to 2016 – including up to an estimated $138 million in Australia and  $110 million in developing markets.

Oxfam Australia Chief Executive Dr Helen Szoke said the research into RB, which makes household name products such as Vanish, Dettol, Nurofen and Clearasil, showed how easy it was for big business to take advantage of loopholes to avoid paying their fair share of tax.

Dr Szoke said the investigation underscored the urgent need for tougher tax laws and greater transparency to tackle the widespread problem of rampant tax avoidance.

“The case study highlights the widespread problems with a tax system that is robbing Australia of revenue that could be used for healthcare, education and jobs – as well as depriving poor countries of money that could be used to tackle poverty and inequality,” Dr Szoke said.

In Australia, the estimated tax loss could pay for more than 144,000 emergency ward admissions in our hospitals. In rural Pakistan, $110 million could provide sewage treatment for more than half a million people.

Dr Szoke said after company restructures, RB’s profits plummeted in Australia and rose dramatically in its lower-taxing regional hub in the Netherlands – despite revenues remaining relatively stable.

“Oxfam is not suggesting RB has done anything illegal – but this case study highlights how broken the tax system is and sadly reflects just the tip of the iceberg of multinationals that are manipulating loopholes in the law to avoid paying much-needed taxes,” Dr Szoke said.

“In response to Oxfam’s research, RB has publicly backed the push for tougher tax laws. RB has issued a statement calling on governments to introduce stronger rules to ensure companies that don’t exploit loopholes in the tax system to slash their tax bills are not undercut by rivals that do.

“Oxfam welcomes RB’s support – it is important that successful, influential companies like RB make the case for greater transparency and tighter tax laws in the outdated global tax system. We are calling on other big business to follow RB’s lead, and for RB and others to go further by being transparent about their tax structures worldwide.

“We are also calling on the Federal Government to get tougher on tackling tax avoidance by introducing public country by country reporting. This would require multinationals to come clean on the profits they earn and the taxes they pay in every country in which they operate.”

The Oxfam paper has been released on the heels of an advertising blitz by the Federal Government promoting its attempts to tackle tax avoidance. The campaign has prompted public debate over potential loopholes in the laws, which came into effect this month.

“One in three large companies paid no tax at all in Australia in 2014-15,” Dr Szoke said. “Until we see tougher action to crackdown, Australians and vulnerable people in poor countries will continue to miss out.”

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