Offshore firms not paying tax share
A LEADING international political economist has warned that democracy is being damaged by the insidious creep of transnational corporations into government policy and their refusal to adopt country-by-country accounting practices, which have helped them avoid taxes.
"I think democracy is under real stress from large corporations," said Susan George, who is here to present the Ted Wheelwright Memorial Lecture at the University of Sydney tonight.
"It's not the small to medium-sized enterprises but the transnational corporations that are really gaining ground in every area and putting pressure on governments to protect them at the expense of the citizenry."
The author of 16 books on themes dealing with corporate power, Ms George has for decades been an outspoken critic on issues ranging from global inequality and corporate globalisation to tax and debt.
The France-based political economist and human rights activist says the size, reach and wealth of transnational corporations and their capacity to influence and infiltrate governments to avoid tax payments was a major concern for democracy.
"These companies are able to put their profits where the tax laws are low or non-existent, and then they put their losses somewhere else like Australia, where the taxes are higher.
"Then they profit from all the benefits that a country supplies, like transport, health services, police, and they make no contribution to the upkeep of those services," Ms George said. "They are free riders and they specialise in that."
Her criticisms come at a time when multi-billion-dollar corporations such as Apple and Google Australia are under fire for abusing tax havens in Ireland.
Last month the federal Treasury warned that Australia's corporate tax revenue faced a significant risk from outdated global rules that allow multinationals to funnel profits into international tax havens.
Treasury advice said global companies were using offshore marketing hubs and intellectual property expenses to substantially reduce tax liabilities in Australia.
"If we want to get rid of tax havens and we want transnational corporations to pay their fair share of taxes, we have to have country-by-country reporting. But the biggest problem is that the International Accounting Standards Board has no plans to make this type of reporting a mandatory practice," Ms George said.
"And that is because it is controlled by the accountancy firms who don't want this because their clients would then have to pay something resembling fair taxes."
Read the full article here.