In Australia, over a quarter of large corporations managed to pay no income tax during the 2023-24 financial year, a trend that includes notable names like Optus’ parent company Singtel, streaming giant Netflix, and several major energy firms. According to recent figures released by the Australian Taxation Office (ATO), this percentage has decreased to 28%, marking the lowest level recorded since corporate tax transparency reporting began, down from 31% the previous year.
ATO Assistant Commissioner Michelle Sams pointed out that this is the first instance where the number of entities not paying tax has fallen below 30%, reflecting ongoing efforts to hold large companies accountable for their tax obligations. Nonetheless, it was highlighted that multiple enterprises, despite reporting substantial incomes – such as Singtel with $8.2 billion, Netflix with $1.18 billion, and other energy companies like Santos and AGL – still paid no tax.
Interestingly, the highest income reported with no tax paid was by food giant JBS, which earned $19.71 billion. However, it’s important to note that having significant revenue does not necessarily guarantee profitability; for example, Australia Post, with $9.29 billion in income, reported a loss that exempted it from tax obligations.
Sams acknowledged that there are legitimate reasons for companies not paying income tax and assured the public that the ATO is vigilant in monitoring corporations to prevent exploitation of the tax system. However, this situation has drawn criticism from politicians like Greens Senator Nick McKim, who argued that nearly one in three large firms not contributing to tax is indicative of a flawed system. He noted the disparity faced by everyday workers, who pay taxes without the leverage to avoid such liabilities.
In contrast, major mining companies emerged as the largest taxpayers, with Rio Tinto, BHP, and Fortescue contributing significantly to the tax revenue at $6.25 billion, $6 billion, and $3.93 billion respectively. This marks the third consecutive year that the mining sector has outperformed all other industries combined in tax contributions.
The banking sector also made substantial contributions, with the big four banks each exceeding $1 billion in tax payments, led by Commonwealth Bank at $3.43 billion. Overall, large businesses contributed $95.7 billion in income tax, which reflects a decrease of about $2 billion from the past year.
Despite fluctuations in tax contributions tied to economic conditions, the general trend shows robust compliance among Australia’s largest corporates, supported by the ATO, which boasts that Australia enjoys one of the highest compliance rates for large businesses globally.