Tougher laws, a new crime fighting taskforce, larger fines and shaming cheats were all announced as part of the government’s strategy in Tuesday’s budget.
However the government was unable to say how much money it expected to raise from the 30 unnamed multi-national companies it says its new anti-avoidance law is targeting.
The Australian Tax Office has been given $11.3 million to enforce the new standards around transfer pricing – selling goods to a related entity to minimise tax – that the likes of BHP Billiton, Apple and Google have been accused of doing.
The new legislation outlaws what the government says are contrived company structures in which Australian sales are booked overseas and subject to no or low global tax.
Those caught doing so will have to pay back the tax, plus 100 per cent of the unpaid tax again as a fine, plus interest.
Multinational tax avoidance by tech and mining companies was the subject of recent heated Senate hearings, in which company executives were publicly grilled about their offshore arrangements.
BHP was forced to disclose that the ATO had so far ordered it to pay $522 million in taxes and fines related to its marketing hub in Singapore, which is regarded as a tax haven.
Treasurer Joe Hockey said in his budget speech that many multinationals did have and were aggressively minimising their tax.
“What that means, is that families and small businesses are forced to carry more than their fair share of the tax burden,” he said.
“Under this new law, when we catch companies cheating, they will have to pay back double what they owe plus interest.”:
Mr Hockey said the government was also working with business and the board of taxation to develop a voluntary code that highlights companies that pay their fair share of tax and publicly disclose it – and those that don’t.
The action is aimed at enhancing public confidence in the tax system.
The government said it expects to raise $419.7 million over four years through its Serious Financial Crime Taskforce, that will target tax evasion, along with other financial crimes and the black economy.
The latter will also be tackled by a three-year extension of the GST compliance program and is expected to raise $1.8 billion.
It expects to collect $350 million from the new “Netflix tax”, which closes loophole and applies GST to foreign businesses selling digital products, such as downloaded movies, games and e-books and maybe Airbnb, Uber and Netflix.