Senate to look further at Panama Papers tax havens

The headquarters of Mossack Fonseca firm, in Panama City, Panama. Source: AAP

A Senate committee says multinational companies have resorted to obfuscation and contrariness to avoid explaining why they pay so little tax.

Revelations of international tax avoidance outlined in the so-called Panama Papers have prompted a Senate committee to defer its final report on corporate tax practices.

But it said foreign multinationals operating in Australia did engage in aggressive tax practices and the public was understandably sceptical that some paid little tax and others none at all.

The Senate economics references committee launched its inquiry into corporate tax avoidance in October 2014.

In hearings last year, a succession of big multinationals appeared before the committee, insisting they paid the appropriate amount of tax and that their activities were consistent with Australian law.

In evidence to the final hearings on Thursday, Tax Commissioner Chris Jordan revealed the Australian Taxation Office was investigating Australian residents identified in the Panama Papers, a vast trove of documents leaked from a Panama law firm.

That includes some 800 individual Australian taxpayers. Already, 80 names have matched those on the Australian Crime Commission's serious and organised crime intelligence database.

The committee said because the ATO was still examining this information, it will defer further consideration of use of tax havens.

"Consequently, the committee intends to consider Australians' use of offshore facilities to avoid paying their due taxes and will seek an extension to the final reporting date in order to examine and report on this matter," it said in its second report, released late on Friday afternoon.

The committee said their hearings had made it clear that some multinationals go to extreme lengths to conceal tax minimisation practices, even under the intense scrutiny of a parliamentary committee.

It cited "their contrariness in answering questions, propensity to obfuscate and in some cases, simply not answering or deliberately misunderstanding the question".

"The secrecy about their tax arrangements together with the complicated nature of such arrangements pose a challenge for the ATO in unravelling and assessing the legitimacy of transactions," it said.

Source: AAP

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch