Tax transparency has grabbed headlines recently. After too much emphasis had been placed on a measure that will require some basic & potentially misleading tax data to be disclosed, some sense had finally started to emerge with articles like this that focused on broader financial reporting (http://www.theguardian.com/australia-news/datablog/2015/dec/01/one-in-six-companies-exempt-from-reporting-tax-are-political-donors).
Now, as noted in the linked article below, Parliament has now passed a Bill that will require private companies with turnover above $200m to reveal revenue and tax information.
Commentators should have no cause for celebrating this measure:
- the data to be reported is sourced from ATO disclosures by companies already "doing the right thing". There doesn't seem to be a means of reporting prior year adjustments, from say a large tax audit so the "suspicious tax schemes" reported in the linked article would not be affected
- the data provides a blurry picture at best. The picture can only brought into focus with a knowledge of the broader financial position - that is why the focus on corporate reporting is more meaningful
- mid-size business is a key growth sector in our economy. There is no excuse for MSBs to be used as pawns in a political game
This whole issue is being examined through too wide a lens. There are already laws and other initiatives that are focused on "...the giants of big pharma, the tax dodgers of the digital new guard, the world's biggest oil and gas companies and the Big Four audit firms..." We've already seen recent ATO success in their tax challenge to Chevron, success that did not have the benefit of being played out in public.
How the public airing of the tax affairs of successful Australian private mid-size businesses will help advance this cause is beyond me.
The government nearly pushed its Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 through Parliament last month. But it was blocked in the Upper House. The day before, independent senator Nick Xenophon carried the crossbench, and Labor and the Greens, too, on an amendment to force foreign multinationals to the same standards of disclosure as companies listed on the Australian Securities Exchange. The government lashed out at both amendments and threatened to kill its entire tax avoidance bill just to jettison them.Though Labor, the Greens and independents did not back down. During the next two weeks, the government realised the impasse would leave it with nothing to show on the tax reform front for 2015, unless it struck a deal.