Oxfam Australia Calls Out Multinational Companies For Tax Avoidance

Tax Avoidance

Oxfam Australia says the multinational company Reckitt Benckiser which manufacturers products that can be found in virtually every single Australian home has avoided $138 million worth of tax. The company which is now known as RB sells a wide range of products ranging from Dettol to Durex chose to locate its Australian regional hub in the Netherlands as part of a corporate restructuring which took place three years ago.

Benefiting from tax exemptions

The restructuring allowed the firm to be exempt from paying tax on as much as 75 per cent of its profits in the Netherlands, lowering its effective tax rate to as low as 7 per cent. In its ‘Making Tax Vanish’ report published by Oxfam, the aid agency says the Australian tax system is deeply flawed, allowing global corporations such as RB to systematically avoid paying the same level of taxes that Australian companies have to pay.

Ordinary Australians becoming impatient

Dr Helen Szoke Oxfam Australia CEO says she thinks that regular Australians are becoming increasingly impatient with global corporations and their tax practices. She says that many multinationals like RB that make products that are very familiar to Australians and given that Aussies are supporting their bottom line, it is expected that those companies should be paying tax in Australia.

Government is cracking down

Dr Szoke says it is perfectly reasonable for Australians to ask the question that if they are held to account for their taxes why aren’t global companies also held to account? The report comes at a time when the Australian government is indeed cracking down and is toughening the country’s laws on corporate tax avoidance as part of its “Earned here, Taxed here”

Tax avoidance means public services are not funded

Whilst tax avoidance is not illegal in Australia, it does mean that Australia does not receive funding for essential public services. For example, the $138 million in tax RB should have paid in tax between 2013 to 2015 could have been used to fund over 144,000 emergency patient admissions. The money could also have been used to fund 11,000 secondary school students and provide as many as 3000 disabled people with individualised support.

Australia misses out on as much as $6 billion tax revenue

Oxfam says it is behind the efforts of the Australian government to limit corporate tax abuse, but also urges additional reforms which would eliminate other common measures that result in tax avoidance. Oxfam reckons that Australia misses out on as much as $6 billion a year in tax revenues because multinational companies are engaging in corporate tax avoidance.

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