A parliamentary committee has recommended publicly shaming companies that are not paying their fair share of tax in Australia, to the applause of small business advocates.
The proposal is one of 17 recommendations put forward by the Senate’s Standing Committee on Economics in its interim report into corporate tax avoidance.
Other strategies to sustain government income include greater co-operation with other countries in order to address profit-shifting, as well as an annual report by the Australian Tax Office that details how much money Australia has lost due to tax avoidance.
The draft report is part of a 10-month investigation into profit-shifting by companies such as Apple and Google, chaired by Labor Senator Sam Dastyari.
Small business has welcomed the draft recommendations, arguing international companies have gotten away with tax avoidance measures for far too long.
Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany he hopes the Senate’s recommendations will lead to companies like Amazon having to pay their fair share of tax.
“It’s not debatable,” Strong says.
“Quit playing games. It’s not dodging tax, it’s theft. With small businesses that don’t pay their tax, the ATO hunts them and chases them down and good on them. The big end of town have got to lead the way on this… otherwise the good big businesses are going to have to pay more tax than the bad ones.”
Strong says he also welcomes the acknowledgment that Australia needs to work with other countries in order to tackle profit-shifting.
“Nothing is going to happen if the international community don’t come together on this,” he says.
“It’s not an Australian problem – it’s an international problem. They’re dodging tax everywhere and that’s not good. It really is one of those international issues and we can lead the way on this.”
However some government senators involved in the inquiry have expressed their “deep concerns” over the recommendations in the interim report, arguing in an attachment to the report the Abbott government has taken “strong action” to combat corporate tax avoidance.
Joe Hockey has previously promised tougher penalties for businesses using artificial tax arrangements to avoid paying tax in Australia.
Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
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