Face of Nation : The Buried Treasure report, which bases its findings on 2015 data, said this could have resulted in an estimated $289 million in tax revenue being ripped out of developing countries in Africa.
The report does not accuse any companies of illegal activity, but calls on mining companies to pay their “fair share” of tax by aligning payments with actual economic activity, publicly renouncing the use of ‘tax havens’ and ending the practice of shifting profits to low-tax jurisdictions.
Oxfam Australia chief executive Helen Szoke said the almost $300 million lost was equivalent to seven times the total cost of national malaria control programs in nine of the poorest sub-Saharan African countries where Australian mines exist. She called on the Federal Government to require Australian companies to publish more detailed information about the taxes they pay around the globe.
Ms Szoke said Australia was lagging behind other countries on mandatory tax transparency laws, with the UK and Canada requiring multinational mining companies to publicly come clean on their tax payments on a country-by-country and project-by-project basis. Australia currently collects country-by-country reports from large public companies, but the data is only seen by tax authorities. It is up to companies whether they want to voluntarily publish more detailed information.
Minister for Housing and Assistant Treasurer Michael Sukkar said Australia was a global leader in the international fight against corporate tax avoidance and a “strong advocate of tax transparency”.The report ranked 40 ASX-listed Australian mining companies on a scale showing which are the most and the least transparent on public reporting of their tax affairs.
It found the tax affairs of mining giants remain “shrouded in secrecy”, with half of the companies analysed falling into the worst category. “The reported data is so unclear, incomplete and patchy that no definitive, accurate amounts of global tax payments across the entire industry can be identified,” it said.
However, some of the big miners including BHP and Rio Tinto were ranked in the report as being transparent about their tax affairs. Both miners have for several years voluntarily moved to report taxes paid in each country, and on each project they operate.
An International Consortium of Investigative Journalists (ICIJ) Mauritius Leaks investigation released this week noted overall one in every six dollars that flow into Africa is from tax haven usage, making it highly likely to result in tax revenue losses. Oxfam said its $1.1 billion estimate, resulting from Australian mining companies’ $40 billion investment in Africa in 2015, was “conservative”.
It noted the amount of inflows relative to outflows, using various information sources including IMF data, was low. “It is an estimate based on an imperfect econometric model, because we do not have the public data we are asking for,” Oxfam said. “The $1.1 billion estimate in profits shifted, and resulting $298 million in tax lost, is relative to total global tax loss in Africa due to avoidance practices of around $15 billion annually, according to economist Gabriel Zucman.”
