Complex tax deprives Africa
Experts say Australian miners have shifted about $1.1 billion in profit out of Africa in just one year.
The Buried Treasure report by Oxfam and the Tax Justice Network (PDF) says an estimated $289 million in tax revenue is being ripped out of developing countries in Africa each year by Australian miners.
While the report does not accuse any local firms of illegal activity, it calls on mining companies to pay their “fair share” of tax.
The report calls for companies to align payments with actual economic activity, and openly renounce the use of 'tax havens' and complex financial structures.
Oxfam Australia chief executive Helen Szoke said the amount of lost tax for African nations is about seven times the total cost of malaria control programs for nine of the poorest sub-Saharan African countries that Australian companies operate in.
She wants the Federal Government to force Australian companies to publish more detailed information about their global tax arrangements.
Ms Szoke says Australia is behind many other countries on mandatory tax transparency laws. Both the UK and Canada require multinational mining companies to report their tax payments on a country-by-country and project-by-project basis.
Australia does collect country-by-country reports from large public companies, but only tax authorities get to see the data.
The report found many of the top 40 ASX-listed Australian mining companies keep their tax affairs “shrouded in secrecy”.
Major miners BHP and Rio Tinto were highlighted in the report for their transparency about their tax affairs, but they appear to be the exception.
“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.
“Reporting in this way can help to veil unethical tax practices and enable companies to hide their profits in order to avoid paying the right amount of taxes in some of the poorest countries in the world.”
The Mauritius Leaks investigation released by International Consortium of Investigative Journalists (ICIJ) last week found one in every six dollars that flow into Africa is from tax haven usage, suggesting that tighter regimes may result in tax revenue losses.
The Oxfam report says mining operations owned by three Australian companies: Perseus Mining, MMG and Iluka Resources, would collectively have paid $149 million in additional corporate income tax if they had not “exploited some form of tax concession or loophole”. All three companies reject this claim.