By Marcus Honesta.
Very few things seemed to monster the big tech giants Facebook, Google, Twitter, Instagram Amazon & Uber.
They blithely bluster forth, repelling boarders, ignoring threats of fines or sanctions from government bodies that seem to grapple with difficulty as to just how to regulate or control them. However, there is one body that has their measure, and that is the Tax Office. If ever there was a body guaranteed to put the fear of God into a rogue organisation the Tax Office has the wood on them.
In a week that the digital giants would rather forget, key crossbench Senator Stirling Griff says his party would support a 3 per cent tax on digital giants, like that being proposed for the European Union, as the government continues to seek backing for its company tax cuts.
The government is just two Senate votes short of securing the passage of its legislation for the remainder of the tax cut package and is hoping clampdowns on multinationals can convince Senator Griff and his Centre Alliance colleague Rex Patrick to come on board.
Senator Griff said on Monday “that if they could be convinced there was sufficient revenue over the medium term to fund both the company tax cuts, worth $35 billion over 10 years, and the income tax cuts, worth $140 billion over 10 years, as announced in the budget, without having to cut essential services, such as health and education, then they could vote for both packages.
“If there’s sufficient revenue and no reduction in core services, we would consider that, or any other form of tax cuts,” he said.
But he stressed Centre Alliance wanted to see the details of the planned tax measures designed to woo their vote and that of others.
On Friday last week, The Financial Review claimed the government had withheld from announcing in the federal budget planned changes to the petroleum resources rent tax in case they were needed as leverage later next month to secure support for the company tax cuts.
However, Pauline Hanson’s One Nation may the preverbal fly in the ointment. She today has come out with a list of demands for her support that may be difficult for the Government to support, but this remains to be seen.
On Monday, Fairfax Media and News Corp claimed that the government and were also planning to use as a bargaining chip a new tax on such digital giants as Google, Uber and Facebook.
The release of a discussion paper proposing options is imminent. The EU proposal of a 3 per cent tax on advertising revenue from “globally significant enterprises” with annual turnovers above $1 billion made sense, Senator Griff said.
He said: “It was smarter to tax turnover rather than profits because companies play games with profits, they shift”.
In March, Treasure Scott Morrison told the Financial Review from a G20 meeting in Argentina that Australia, like other G20 nations, might go it alone with measures to tax digital economy companies because efforts to agree on a multilateral process were moving too slowly.
He was pessimistic about a multilateral solution being agreed to through the G20 and OECD. Efforts were moving too slowly due, in part, to resistance from the companies.
“There was a view among some that we should wait until there was some sort of multilateral consensus,” he said.
“Others were of the view we need to get moving and any multilateral position will be one of harmonisation, ultimately.”
A digital tax on turnovers would add to other measures the government has already implemented to try to force multinational giants to pay their fare share of tax.
These include applying the GST to digital products and services imported by Australian consumers, and sales of low value goods imported into Australia, including those purchased online.
The government has implemented a diverted profits tax, which aims to force multinationals pay tax on the profit made in Australia.
A government source said another measure, Multinational Anti-Avoidance Law, has seen additional sales of $7 billion each and every year returned to Australia and hundreds of millions of dollars of additional GST revenue being paid.
“The government is committed to ensuring that digital businesses pay their fair share of tax in Australia and is actively engaging with the OECD in exploring options for taxing the digital economy,” he said.