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The Forum > General Discussion > Mutili national tax avoidance is back on the radar, but at what cost1

Mutili national tax avoidance is back on the radar, but at what cost1

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I note that Multi national tax avoidance is firmly on the radar again but have governments from all sides really thought this trough.

Sure, we can force these international giants to pay what ever percentage of tax we choose, and sure, we can then do the numbers Revenue/sales/tax payable and hi presto, billions more in tax.

BUT, what we can't do is force them to continue trading in what is one of, if not the, most expensive countries to do business in.

Our movie stars and sporting greats are a prime example.

One person can make tens if not hundreds of millions each year from movies, move to a tax haven country, or a country that treats tax differently and pay little to no tax and they are not on any radar. This is just one person employing few people directly if any at all.

So with the likes of Hugh Jackman, possibly having made in excess of a billion, how much tax has he paid in Australia?

Governments and supporters of tax hunts like these need to remember one very simple rule, that is, 'for every action there is a reaction' and the reaction in this case may well be that many of these corporate giants, who collectively raise billions in taxes from company tax, to payroll tax, to GST, PAYG, Fuel excise, FEES etc, the list goes on. They also occupy massive amounts of corporate space, all of which could be placed at risk.

Unfortunately the mass stuff ups of the Kevin 07 experiment are coming home to haunt us and governments have no idea which way to turn.
Posted by rehctub, Wednesday, 24 February 2016 6:48:52 AM
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We don't need to force them to continue to trade here. They trade here because it's profitable!

And I'm not sure what you mean by "the mass stuff ups of the Kevin 07 experiment". At the moment we're being haunted by the failures of much more recent governments, and the Kevin 07 path is the most sensible solution.
Posted by Aidan, Wednesday, 24 February 2016 9:04:10 AM
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Do try to wake up a bit Aidan, & not talk such garbage.

Ford, GM, Toyota & the rest of the car industry will continue to sell their products here, without paying any tax. They realised there is no reason to have a presence here, & it is much more profitable not to.

I buy a great deal of what I want over the net. Some of this is from Oz based companies, or with a warehouse in Oz, but increasingly it is from overseas outlets. Some companies are giving up on Oz outlets. Our freight costs are often more than the cost of the product delivered to my door from Hong Kong, Europe or the US.

This costs employment, & puts a great load on our foreign exchange. Individual purchases pay at least 5 times as much per item to overseas suppliers as do companies who buy in bulk, all money leaving the country.

Why would any company pay excessive wages for the privilege of establishing in Oz, when it is more profitable to trade from outside?
Posted by Hasbeen, Wednesday, 24 February 2016 11:22:21 AM
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Do try to wake up a bit Hasbeen, & not talk such garbage.

Ford, GM, Toyota & the rest of the car industry did not leave because of high taxes. They left because they couldn't profitably make cars here.

Lower taxes do make a country a better place to do business. However they're only one of many things that do so. Things like good infrastructure, low interest rates, a highly skilled workforce and an effective legal system are usually more important. Yet advocates for lower taxes typically treat them as the only thing that matters; they seem to forget that making a profit in the first place is more important than keeping a higher share of the profit they make.

Taxes on turnover, though, are a different matter and I'd like to see GST abolished (lowering the cost of living and making our retailers more competitive with overseas ones).
Posted by Aidan, Wednesday, 24 February 2016 12:23:25 PM
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For my opinion regarding tax, there needs to be 2 things considered as they both have an effect.
1 Is what is the revenue collected being spent on.
2 Is the tax collected.

As a country I believe we waste way too much, from 3 tiers of Government to $20 Billion for submarines (just to name 2 examples) when we don't even have the sailors to keep them at sea.

There are too many examples of waste to list them.

With regard to the thread subject, a company any company for that matter should pay the tax in the country where the revenue is earned.
Posted by Philip S, Wednesday, 24 February 2016 3:20:16 PM
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Aidan, thanks for the sensible comment as to the inputs that determine the criteria which multi nationals apply before setting up operations. The philosophical driven blinkered brigade simply see high wages and taxes as the be all, and end all, and nothing else matters.
Given their reasoning, multi nationals would be clamoring to set up operations in the wage starved, tax free countries of Africa, at the expense of developed nations like Australia. The opposite is the case.
Multi nationals have been able to exploit the fears of the conservative blinkered brigade, the fear that they will simply pull up stakes and move elsewhere. In this way they have been able to win many favorable concessions from governments in countries like Australia. Minimal taxation has been but one of those most favorable concessions.
Posted by Paul1405, Thursday, 25 February 2016 7:04:35 AM
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