- The Australian Taxation Office (ATO) has highlighted a trend towards “willing compliance” from big companies in its latest Corporate Tax Transparency Report
- The ATO says Tax Avoidance Taskforce drives improved tax compliance and has helped bring in over $10 billion in extra tax from public and national businesses since 2016
- Deputy Commissioner Rebecca Saint says the latest transparency report reflects the tax office’s “intensive engagement with the top end of town” over the past several years
- The ATO’s transparency report shows that Australia’s minerals industry paid more company tax than any other industry in the 2020 financial year
- Banking, finance, and investment sector has consistently been a top tax-paying industry for the past five years, as has the wholesale, retail, and services sector
The Australian Taxation Office (ATO) has highlighted a trend towards “willing compliance” from big companies in its latest Corporate Tax Transparency Report.
The ATO said its Tax Avoidance Taskforce has driven improved tax compliance from corporations and helped bring in over $10 billion in additional tax from public and national businesses since its inception in 2016.
The Corporate Tax Transparency report highlights the tax information reported to the ATO by certain large companies each year. This year’s iteration of the report covered 2370 corporate entities, of which 58 per cent were foreign-owned entities with an annual turnover of over $100 million.
These companies combined paid over $57 billion in tax over the 2020 financial year, accounting for roughly 65 per cent of all corporate income tax over this time period.
ATO Deputy Commissioner Rebecca Saint said the latest transparency report reflected the tax office’s “intensive engagement with the top end of town” over the past several years.
“While the tax paid by this population may fluctuate year on year, the overall trend couldn’t be clearer,” Ms Saint said.
“Corporates are placing a higher value on tax compliance, driving consistent and willing voluntary participation.”
She said the taskforce required big businesses to assure the ATO they were paying the right amount of tax by having regard to objective evidence through the ‘Justified Trust’ program.
“The health of the tax system is underpinned by willing participation, which is shown by four out of five of the largest businesses in Australia having obtained either a high or medium assurance rating,” Ms Saint said.
Woodside (WPL), as one of the biggest taxpayers in the country, is subject to this program.
Woodside CEO Meg O’Neill said the company “does the right thing” when it comes to tax.
“As one of the country’s largest taxpayers, Woodside is subject to the ATO’s Justified Trust program and has achieved the highest assurance rating, attained by just under half of the top 100 taxpayers,” Ms O’Neill said.
“The rating means that the ATO is assured that Woodside is paying the right amount of income tax.”
According to the ATO, businesses with more than $5 billion in annual income represent just 2.7 per cent of the entities in the transparency report but account for 57 per cent of tax payable.
Entities with annual turnover over between $250 million and $5 billion account for 55.7 per cent of the report population and 37.9 per cent of the tax payable.
Mining sector forking out the most in taxes
The ATO’s transparency report showed that Australia’s minerals industry paid more company tax than any other industry, with mining companies contributing more than 40 per cent of all company taxes reported by the 2370 entities.
The Minerals Council of Australia said BHP and Rio Tinto together paid more than $10 billion in company tax over the 2020 financial year.
“The industry pays the highest wages, generates substantial economic activity, pays the most company tax and delivers the most export revenue,” the Minerals Council said.
“A strong mining industry is essential to Australia’s economic success.”
From between the 2011 financial year and the 2020 financial year, the minerals sector has paid almost a quarter of a trillion dollars in taxes and royalties to federal, state, and territory governments.
According to the ATO, the banking, finance, and investment sector has consistently been a top tax-paying industry for the past five years, as has wholesale, retail, and services.