New Multinational Tax an MRRT Style Debacle All Over Again

3 May 2016

Media Release: New Multinational Tax a MRRT Style Debacle All Over Again

The Australian Taxpayers’ Alliance, a non-partisan advocacy group, today condemned the decision of the Commonwealth Government to introduce a “Profit Diversion Tax”.

“By imposing a short sighted new tax on our most agile and innovative companies, the government has failed to grasp the nature of the 21st century agile economy” said Tim Andrews, Executive Director of the Australian Taxpayers’ Alliance.

“With the announced tax estimated to raise $100 million annually, in the context of a $420 billion dollar budget, this measure is purely symbolic – and the symbolism is that Australia is closed for business and does not value innovation or intellectual property rights.

“In addition, hypothecated revenue increases from other “crackdowns” are unlikely to materialise. Every year without fail the ATO promises savings through “crackdowns”. These have never occurred.  Any revenue gains will be modest and will be dwarfed by the damaging fallout to our reputation.  With $679 million for the ATO to employ 1300 more tax collectors, this is little more than a job-creation scheme for the ATO.

“Australia’s corporate tax rate is one of the highest in the world. It is little wonder that businesses are fleeing offshore. If the Government wants to get serious about tax reform, it shouldn’t wait until 2026-27 to reduce our headline corporate tax rate – it should act immediately.

“Blaming the budget deficit on companies not paying “their fair share” is not just irresponsible – it is dishonest. As Treasurer Morrison previously admitted, the Commonwealth does not have a revenue problem. Revenue has continued to increase in nominal terms and as a percent of GDP.  Australia has a spending problem – and these measures fail completely to deal with it.

The only way the budget can be brought back to balance is through the government learning to live within its means  – and not through another short sighted tax.

 

MEDIA CONTACT:

Tim Andrews
Executive Director
Australian Taxpayers’ Alliance
(m) 0434064934
(e) tandrews@taxpayers.org.au
(w) www.taxpayers.org.au

Updated 8:35pm 

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