Tax Inspectors Without Borders, launched in 2015 by the OECD and the United Nations, helps countries collect tax, including from multinational companies squirrelling funds away in tax havens such as Bermuda and the Bahamas.
Tax havens hurt equality, especially in developing countries. Globally, two out of every five dollars of multinational profits are estimated to be channelled through tax havens. For regional neighbours such as the Philippines and the Solomon Islands, the amount shifted into tax havens is over 2 percent of GDP.
Tax avoidance takes away precious funds that could be used for vital services.
Labor will provide $5 million a year to Tax Inspectors Without Borders, with a portion of that funding assisting the Australian Tax Office to send tax experts to developing countries who request our help.
It is estimated that for every $1 spent by donor countries on the program, developing nations have recouped $100 in additional tax revenue.
Canada, Finland, Germany, Ireland, Japan, Luxembourg, The Netherlands, Norway, Sweden, United Kingdom are already supporting the program.
With a 100:1 rate of return, Labors $5 million investment per year would recoup $500 million in revenue to help developing nations fund schools and hospitals.
This is part of Labors commitment to rebuilding our overseas development assistance program, and the latest step forward on tackling multinational tax avoidance.
If elected, a Shorten Labor Government will:
- Tighten debt-deduction loopholes used by multinational companies, improving the Budget by $3 billion over the medium term.
- Close a debt deduction loophole to ensure consistent treatment in related party financing arrangements.
- Automatically deny deductions from companies for travel to and from tax havens, and clamp down on unsubstantiated allowances related to tax havens.
- Increase penalties for individuals and entities promoting tax evasion and avoidance.
- Crack down on citizenship shopping by requiring all individual Australian taxpayers to notify and declare to the Australian Taxation Office if they have residency or citizenship of any other jurisdiction and the name of that jurisdiction.
- Introduce public reporting of country-by-country reports, ensuring the release of high-level tax information about where and how much tax was paid by large corporations (over $1 billion in global revenue).
- Provide protection for whistleblowers who report on entities evading tax and, where whistleblowers information results in more tax being paid, allow them to collect a share of the tax penalty.
- Introduce a publicly accessible registry of the beneficial ownership of Australian listed companies and trusts, allowing the public to find out who really owns our firms.
- Introduce mandatory shareholder reporting of tax haven exposure, requiring companies to disclose to shareholders as a Material Tax Risk if the company is doing business in a tax haven.
- Appoint a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes.
- Introduce public reporting of Australian Transaction Reports and Analysis Centre (AUSTRAC) data and require the annual public release of international cash flow data.
- Require all firms tendering for Australian Government contracts worth more than $200,000 to state their country of domicile for tax purposes.
- Develop guidelines for tax haven investment by superannuation funds.
- Require that the Australian Taxation Offices annual report provide information on the number and size of tax settlements.
- Restore Labors $100 million threshold for public reporting of tax data for private companies, which was raised to $200 million by the Liberals and Greens in a move which exempted two-thirds of private firms from tax transparency.
Authorised by Noah Carroll, ALP, Canberra.
