A Fair Business Tax !

We are in a recession  and it is abundantly clear that the way ahead is going to be painful. The isolation needed to combat the coronavirus is being slowly lifted and we await to see what sort of economy emerges, but there is the expectation that we will have to endure both unemployment and under- employment.

It is the average employee who is being asked to delay a long awaited wage rise and in particular, civil servants in NSW are asked to accept a twelve month wage freeze and that includes the very people who put their lives on the line to keep hospitals and medical services running during the pandemic.

It is galling to read reports that indicate the biggest businesses in this country continue to use both the accounting and the legal system to install systemic tax avoidance.  Once again the tax office is going after them and again it will be a long running battle in the courts, with the big end of town using its wealth to recruit the brightest and sharpest cover to avoid paying their fair share of the tax burden.

This becomes a legal battle between the best minds in Australia with the very letter of the law being manipulated to gain a tax advantage.  The ATO is involved in a fight with one of this country's biggest accounting firms and the advice they have given three of Auistralia's biggest corporations which allowed them to move thirty billion dollars of international shares into offshore tax structures which put them out of range of the tax office.

This plan was allegedly designed by the mandarins of PwC Australia as an accounting exercise, but much of the documnentation was carried out by law firms - which allowed it to claim legal priviledge.  It then had to survive the judgement of the highest court in this land and that was a matter of legal argument being used to advantage.

The business world had developed into a very complex miasma.  Intellectual property has become a factor in assessing profit and in many cases the process involved was developed in one country, manufactured in another and exploited in the products sold in a third.  Unscrambling that profit into individual components can become a nightmare.

What needs to apply is a very simple maxim.  If profit is made in Australia it needs to be taxed in Australia and no other exemptions should apply.   The fee for using intellectual rights should be established and registered prior to manufacturing and the value of that which is manufactred outside Australia and imported determined by the courts and not the trading enterprises involved.

We need a simplified tax system.  The one in place allows the companies with the biggest bank accounts to employ the minions that are simply not available to the average Australian business to do battle with the tax office.   Surviving this recession will be harder unless all aspects of the business world pay their fair share of the tax burden.