SCANDALS involving the super-rich robbing the world’s poorest of much-needed tax revenues, like those revealed in the Paradise Papers leak, can be avoided if the Australian Government and others take five immediate steps towards tax reform, Oxfam Australia said today.
International tax reforms have clearly failed, with new estimates suggesting that multinational companies artificially shift almost half of their total global profits – 45 percent – to tax havens.
Oxfam Australia Chief Executive Dr Helen Szoke said tax dodging by multinationals in Australia was costing Australia and developing countries billions of dollars, fuelling a global inequality crisis where just eight men have the same wealth as half the world.
“Australian-based multinationals are part of the problem, contributing to keeping the world’s poorest out of pocket as governments balance the budget by raising taxes on people and cutting vital public services,” Dr Szoke said.
Oxfam estimates billions of dollars’ worth of tax revenue is lost in Australia each year because of Australian-based multinationals using tax havens, and the Paradise Papers scandal comes just weeks after the Australian Taxation Office released data estimating multinationals avoided $2.5 billion in taxes in 2014-15.
Dr Szoke said the Paradise Papers – involving the leak of more than 13 million files – revealed the extent to which the super-rich were getting away with rorting the system to hide their wealth and avoid paying taxes in places like Australia.
The onus was now on the Australian Government, and other governments around the world, to do something about it, Dr Szoke said.
“Stopping the tax scandals is not impossible, if the political will is there. Oxfam’s five-point plan spells out exactly how governments can stop them,” Dr Szoke said.
Oxfam’s five-point plan to stop the scandals calls on the Australian Government to:
1. Agree a global blacklist of tax havens based on comprehensive, objective criteria and implement strong counter-measures including sanctions to limit their use.
2. End corporate tax secrecy by ensuring all multinational companies make financial reports publicly available for every country where they operate; and make extractives companies also report on a project by project basis.
3. End tax secrecy for the super-rich by establishing a centralized public register of the individuals who own and benefit from shell companies, trusts and foundations.
4. Rebalance tax deals by making sure tax treaties do not exploit developing countries tax bases.
5. Create a global tax body where all countries can work together on an equal footing to agree the fundamental tax reforms that are needed to ensure the tax system works for everyone.
“The Australian public deserves to have this information made available to them, and the government must put the interests of the public over the demands of the super-rich and big business. It is now time to act,” Dr Szoke said.