The Turnbull government is cracking down on multinational tax avoidance by creating a new taskforce inside the Australian Tax Office, with 1,000 specialist staff, to prosecute companies and wealthy individuals that are not paying the tax they should.
It will also introduce a diverted profits tax – colloquially known as a “Google tax” – to prevent multinational corporations shifting income overseas to avoid paying tax in Australia.
It has also promised to improve protections for whistleblowers that provide information on tax avoidance to the ATO.
The treasurer, Scott Morrison, says the measures will raise an additional $3.9bn over four years.
“Everyone has to pay their fair share of tax, especially large corporate and multinationals, on what they earn here in Australia,” Morrison said on Tuesday.
“The Turnbull government has been listening to the Australian people on this issue and is taking action.
“Last December, despite opposition, we secured the passage of world leading multinational tax avoidance laws… however, we need to do more.
The government is especially proud of the new taskforce it will create within the ATO, which will comprise hundreds of specialist accountants, lawyers and economists.
It represents a massive redistribution of personnel and resources within the ATO, costing the government $678m over four years.
It will see the ATO’s funding boosted by 55% for compliance programs for multinationals and high wealth individuals.
It comes after the ATO has absorbed thousands of job cuts since 2013-14.
A government spokesman said the 1,300–strong taskforce would not all be new hires – new hires will be “a few hundred,” he said.
The budget papers say: “The government will also ensure the ATO has access to the information it needs by enhancing information sharing between the ATO and the Australian Securities and Investments Commission.”
The improvements to whistleblower protection will take effect from 1 July 2018.
The measures come after the ATO head, Chris Jordan, warned senators last month that the now-infamous law firm at the centre of the Panama Papers leak was not a “one off”, with dozens of other firms running similar operations around the world.
He said the Panamanian firm Mossack Fonseca had not just been used for tax minimisation strategies – it had been used to conceal and aid criminal behaviour too.
The ATO has identified over 800 Australian taxpayers in the Panama Papers data, linking over 120 of them to an associate offshore service provider located in Hong Kong.
About 80 names have also matched with names on the Australian Crime Commission’s serious and organised crime intelligence database, Jordan said.
