30th August 2017
The Australian Labor Party has revealed their plan to propose a private senator’s bill, which will lead to the amendment of the Taxation Administration Act 1953. The Bill, if successfully amended, would require many private companies to publicly release their tax affairs annually.
This is the second time Labor has pushed this change. The attempt was initially introduced in 2013 when Labor had filed for the amendment of the bill to force private companies in Australia with annual turnover more than $100m to publicly release their tax records annually.
The bill, which passed legislation in 2013 by the then Labor government, was wound back by PM Malcom Turnbull’s Coalition Government in 2015. Instead, the act was amended following the Greens’ controversial deal with the Coalition to reinstate the bill by raising the threshold of the private companies’ annual turnover from $100m to $200m.
In their 2015 heated statement, Labor noted the change had left out around 600 big Australian private companies to be exempted for public tax disclosure and accused the Greens of selling out its progressivism. Some Coalition MPs commented that it would pose a risk to the safety of millionaire owners or executives of such companies that fell below the disclosure measurement, and it might eventually lead to kidnapping incidents.
Earlier in July, Shadow Assistant Treasurer, Andrew Leigh, announced that Labor will revive the plan for another amendment to the bill. And if it isn’t successful in the senate stage, they will make it a mandate and bring it back again after the election.
The Australian Tax Office has stated the purpose of the laws in 2015, “The first objectives of the transparency tax laws are to discourage large corporate taxpayers from engaging in aggressive tax avoidance practices and to provide more information to inform public debate about tax policy, particularly in relation to the corporate tax system.”
The controversial 2013 bill amendment states that it requires the Australian Tax Office to publish limited information about the tax affairs of about 1,600 large corporate taxpayers with annual turnover of $100m, before being lifted to $200m in 2015. It also mandated the required publication of periodic aggregate tax collection information and those shared with government agencies related to their foreign acquisition and investment decisions affecting Australia. This means lots of private business information, including the total income of companies, will be accessible to the public. Undoubtedly, there are growing concerns about the misuse of the disclosed information.
Following the announcement, Labor strongly confirmed their support towards the planned proposal which, in their belief, could promote greater tax transparency and tackle inequality, “With rising inequality and mounting government debt, Labor stands on the side of middle Australia and small business, not millionaires and multinationals,” Leigh said.
Mr. Leigh also said, “The proposal would stand alongside other Labor transparency measures, including disclosure of tax haven activity in government tenders, public reporting of country-by-country reports and protection for whistleblowers who uncover tax dodging by multinationals.”
The new proposal by Labor, if passed, would also restore a spotlight on a secret list of private companies that have enjoyed a tax reporting exemption since 1995, claimed The Guardian.