Article by Shane Wright courtesy of the Sydney Morning Herald.
Iron ore miners and the nation’s banks are carrying the federal budget, with corporate tax figures revealing the assault on big technology companies is failing to deliver huge increases in revenue.
The data, compiled by the Australian Taxation Office, also confirms huge multinational energy producers such as Chevron and ExxonMobil again failing to pay any company tax despite reporting revenue of more than $12 billion.
In its seventh year, the ATO’s corporate tax transparency report shows the tax information of the nation’s 2370 largest corporate entities with an income of at last $100 million. Together they paid $57.2 billion in tax, or about two-thirds of all corporate tax.
Of those reporting, a third reported no income tax, with some early signs of the impact of last year’s coronavirus recession. Apart from poor trading conditions, businesses may report no tax due to legitimate deductions.
Mining giant Rio Tinto was the nation’s single largest corporate taxpayer, handing over $5.2 billion on revenues of $39.5 billion. It was a $900 million increase in tax on 2018-19.
BHP Group and BHP Iron Ore paid a combined $5.8 billion in tax, a $700 million increase on the previous year. Fortescue Metals Group’s tax bill increased by $1.2 billion to $2.9 billion.
Commonwealth Bank ($3.3 billion), Westpac ($2.6 billion), National Australia Bank ($1.8 billion) and Australia and New Zealand Banking Group ($1.6 billion) were again among the nation’s top 10 largest taxpayers.
Woolworths, on $50 billion in revenues, paid $481.5 million in tax while fellow retail giant Coles Group paid $475.5 million on revenues of $45.6 billion.
Total tax from the mining sector increased to $25 billion in 2019-20, making it the most valuable to the federal budget. Most of it came out of iron ore producers such as Rio, BHP and Fortescue as the iron ore price lifted strongly. In 2015-16, miners paid $6.3 billion.
The banking sector remains the second most important source of tax, but total payments fell slightly to $14.1 billion. Its contribution to the budget peaked in 2017-18 at $16.2 billion, which was just ahead of the mining sector paid that year.
The government has spent years targeting the corporate tax and GST practices of international technology companies, which are now all paying about the 30 per cent corporate tax rate.
Google, on revenues of $1.2 billion and taxable income of $226 million, paid $56.9 million in tax. Facebook booked $677.5 million in revenues and $56.8 million in taxable income on which it paid $17.1 million in tax.
Apple, with $10 billion in revenues, declared $391 million in taxable income. But its total tax bill fell to $117.2 million, from $149.3 million in 2018-19, despite its overall revenue being lower in 2018-19.
Among those businesses not paying tax, the largest remain in the energy sector.
LNG producer Chevron Australia, which did not pay tax in 2018-19, again failed to trouble the Tax Office despite reporting $12.1 billion in revenue and $169 million in taxable income, in part due to massive write-offs of past infrastructure expenditure.
Fellow energy giant ExxonMobil Australia increased its revenues to $15.5 billion from $13.3 billion in 2018-19. It again did not report any taxable income or tax.
In the retail sector, Myer Holdings did not declare taxable income on revenues of $2.3 billion while Mosaic Brands failed to declare taxable income on its $649 million in revenue.
Among infrastructure and logistics firms, no tax was paid by Toll Holdings (revenues of $5.8 billion), Transurban ($2.5 billion) and Sydney Airport ($1.6 billion). None declared any taxable income on their revenues.
Among media companies, Nine Entertainment, owner of this masthead, reported revenues of $2.4 billion on which it declared $218 million in taxable income and $52.6 million in tax.
News Australia Holdings reported revenues of $1.7 billion but no taxable income or tax while Seven West Media, with revenues of $1.5 billion, had $9.3 million in taxable income but did not pay tax.
Deputy ATO commissioner Rebecca Saint said there was an estimated “tax gap” – the difference between what the ATO estimates should be paid in tax and what it collects – of 4.3 per cent or $2.6 billion across the corporate sector for 2018-19.
“While the tax paid by this population may fluctuate year on year, the overall trend couldn’t be clearer. Corporates are placing a higher value on tax compliance, driving consistent and willing voluntary participation,” she said.
