Chasing the Artful Dodger Multinational tax avoidance
‘Now of course I am minimising my tax and if anybody in this country doesn't minimise their tax they want their heads read…’
Kerry Packer giving evidence to the 1991 House of Representatives Committee of Inquiry into the Australian Print Media Industry1 when questioned about his tax payments.
For most of us, paying taxes is an unavoidable but necessary civic duty. Yet for the modern corporation it has increasingly become a voluntary matter, with a prevailing sense that a corporation’s duty lies in avoiding tax, in order to maximise returns for shareholders. Milton Friedman (1970) famously dismissed views about the moral obligation of business when he said the duty of business is business, and ‘the social responsibility of business is to increase its profits’.2
That view persists, yet fortunately it remains a minority position for most organisations and this paper attempts to outline the nature of international tax avoidance together with the international and Australian responses.
Figures show that Apple paid Australian tax of $81.4 million on revenues of $8.1 billion for 2016-17.
Background
In Australia’s case, the concern with international tax avoidance assumed greater importance in the context of the general debate on corporate taxation. Australia has a high level of foreign ownership and this high level of penetration, particularly in the retail sector, seems to have encouraged people to look at foreign corporate activity in Australia.
Perhaps most importantly, a lot of interest in the subject of corporate tax avoidance was generated by a paper from the Tax Justice Network, which examined the tax minimisation strategies of corporations in Australia. There has also been a good deal of both domestic and international discussion of the exploits of Apple, Google
