Be bold and hold corporations to account on tax, government told

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The Making Multinationals Pay Their Fair Share –Integrity and Transparency

Bill was intended to be operative by 1 July 2023, but has now been referred to a Senate committee for review after intense lobbying by international business interests.

The bill introduces ‘country-bycountry’ reporting, which is designed to combat tax avoidance by requiring large multinationals doing business in Australia to publicly disclose more information about their financial affairs, including their tax strategy. This would include public disclosures of tax and other financial information in other jurisdictions, potentially exposing practices of shifting profits into tax havens.

NSWNMA Assistant General Secretary, Michael Whaites, said it was “deeply disappointing” that the proposed laws were put on the backburner.

“Country-by-country reporting is extremely important towards holding major corporations to account and ensuring they pay their fair share of tax in Australia. Those tax dollars will go towards funding our aged care reform, public health systems and affordable housing,” he said.

“To have this draft bill watered down and referred to a Senate committee raises concerns about the perceived influence big businesses continue to have in Australia today.”

The Guardian reported that the government had come under intense pressure to scale back its legislation from international business lobby groups.

One group, it reported, was “particularly combative”.

SwissHoldings, representing 62 Swiss-based multinationals, including the food giant Nestlé and the pharmaceutical company Roche, questioned how Australia could force international companies to comply with its proposed tax laws.

OVERSEAS COUNTRIES SUPPORT AUSTRALIA’S POSITION

Labor has said work on the multinational tax integrity package continues.

The bill has garnered support from other countries. The investment management division of Norway’s central bank supports Australia’s plans.

“We expect companies to publish country-by-country breakdowns of how and where their business model generates economic value, where that value is taxed and the amount of tax paid as a result,” it said in a submission made public by the Senate.

Michael Whaites said the recent allegations against the financial services giant PwC show “it is clear more transparency is needed, not less, and not the status quo”.

In 2015, PwC was helping the federal government to design tougher multinational tax laws.

The company’s tax chief at the time, who had signed confidentiality agreements with the Australian Government, gave intelligence on government plans to PwC employees both in Australia and overseas. The firm used that information to give more than a dozen US companies a heads-up about the changes –netting millions of dollars for the company and depriving Australia of tax revenue.

The NSWNMA, along with other governance groups such as Transparency International, continue to press for government action.

“We seek tax justice in Australia and call on the federal government to be bold on integrity and transparency of the multinational governments that operate in Australia,” Michael Whaites said. n