Tax collection tallied
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Australia’s top corporations have paid record taxes, but over 1,200 still managed to pay nothing.
The Australian Taxation Office (ATO) has reported a record $97.9 billion collected from large corporations in the 2022-23 financial year, driven largely by the robust performance of the mining sector, particularly in oil, gas, and coal.
This amount represents a 16.7 per cent increase over the previous year.
ATO Deputy Commissioner Rebecca Saint credited the ATO’s Tax Avoidance Taskforce for contributing to improved compliance across large corporations, enabling the ATO to surpass $100 billion in revenue when additional Taskforce revenue is included.
She noted that a focus on the mining sector, which has seen growth due to elevated commodity prices and production cycles, contributed to these gains, with the oil and gas sector alone paying $11.6 billion in corporate tax, making it one of the largest contributors among Australian companies.
The mining sector’s contributions for the 2022-23 year marked the second consecutive year it outperformed all other sectors combined, paying over five times its contribution from 2014-15.
The ATO says tax compliance continues to improve across large businesses, reflecting its targeted efforts.
“We continue to see improvement in the tax compliance of large businesses, reflecting how the ATO’s Tax Avoidance Taskforce has supported improvement in voluntary compliance in addition to strong compliance actions,” Saint said.
The ATO's corporate tax transparency report includes data from 3,985 corporate entities, an increase of over 1,200 from last year.
This expansion results from updated tax laws now requiring reporting for Australian-owned private entities with incomes between $100 million and $200 million, enhancing visibility and promoting voluntary compliance among these companies.
Despite this, 31 per cent of entities, or roughly 1,253 companies, paid no corporate tax during the 2022-23 financial year.
The report attributed this to various legitimate financial circumstances, such as reporting losses or utilising deductions and offsets.
Saint commented on these findings, assuring the public that the ATO remains vigilant, noting that while “there are legitimate reasons why a company may pay no income tax… we pay close attention to those who pay no income tax to ensure that they are not trying to game the system”.
In recent years, the ATO has intensified efforts to combat profit shifting, particularly among multinational corporations that use cross-border tax structuring.
The ATO has collaborated with global bodies on tax reforms, such as the Organisation for Economic Co-operation and Development’s (OECD) Global Minimum Tax rate of 15 per cent on corporate profits.
However, Saint noted that the measure is not a full solution, given that Australia’s corporate tax rate is nearly double this rate at 30 per cent.
The ATO has furthered its compliance measures through audits and reviews.
For the financial year 2024, the agency raised assessments totalling $2.76 billion, of which $2.5 billion involved just 24 companies.
A significant portion of these assessments is currently under dispute, some of which are being settled under a 50:50 arrangement where half of the disputed tax must be paid upfront.
The mining sector accounts for 55.9 per cent of the total corporate tax revenue at $54.7 billion. Other significant contributors include the wholesale, retail, and services sectors, with $19.1 billion, and the banking and finance sector, which contributed $16.1 billion.
The report also indicated a slight decline in Petroleum Resource Rent Tax (PRRT) collections, which fell from nearly $2 billion to $1.87 billion, attributed to shifting oil prices and Chinese demand fluctuations affecting PRRT-liable entities.
