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No 'Paradise Lost' for multinationals' tax evasions

Max O.

At the same time that the released "Paradise Papers" exposed the nefarious corporate tax havens and their tax scam evasions, the Turnball Coalition government was once again promoting the case for lowering the company tax rate. Capitalist roaders have plenty of gall when it comes to tax and profits. It demonstrates the ruthless madness of this economic system and how its proponents never cease to continually devise more of their twisted, miserly schemes.

As a result of the International Consortium of Investigative Journalists (ICIJ) and a number of newspapers, particularly the German newspaper Süddetsche Zeitung, releasing confidential documents from a law firm and a couple of tax minimization companies (Appleby,  Estera and Asiaciti Trust), the world's public once again have become aware of how the mighty multinationals and the filthy rich evade paying tax.

Coming almost two years after "Panama Papers" uncovered a mountain of files from the law firm Mossack Fonseca which concealed the super-rich's wealth, the "Paradise Papers" likewise reveal  that celebrities such as the Queen of England and Australia's former INXS superstar Michael Hutchence, stashed away their fortunes in tax haven islands around the Atlantic.

The leaked “Paradise Papers" also incriminate major corporations across the globe such as Allianz, Allergan, Apple, Facebook, McDonald's, Nike, Siemens, Wallmart, Uber and Yahoo! who use off-shore accounts to profit shift and so avoid taxation.

Tax evaders in Australia: Loy Yang Generator story

The "Paradise Papers" disclosed that Loy Yang B coal-fired plant, owned by the British-listed company International Power, which in turn was owned by the French multinational GDF Suez, recently rebadged as Engie, moved $1bn offshore while pilfering $117m from Australian taxpayers.

The $117m rip-off occurred when the Gillard Labor government's carbon tax scheme also incorporated a $5.5bn compensation package to multinational energy polluters. Loy Yang B was also presented with 4.87m free carbon units which would allow it to emit pollution free for 4 years.

Bruce Mountain from CME, an Australian market analysis firm, showed that generators were passing on carbon tax cost to consumers and keeping the compensation as profit. The Paradise documents disclosed that soon after receiving the $177m compensation, Loy Yang B income shifted $1bn in dividends out of its Australian operation to its owner Engie, through the fittingly named "Project Salmon".

The Cayman Island offices of the offshore law firm Appleby were approached to implement "Project Salmon" as revealed by the "Paradise Papers". According to the tax office's corporate transparency report Loy Yang Holdings did not pay any tax in 2014-15, even though records show an income of $452m. In 2013-14 with an income of $760m, it paid $26.4m in tax.

Tax evaders in Australia: Glencore's Bermuda triangle story

Global mining giant Glencore, the world’s largest mining company, has used cross-currency swaps of up to $25bn, to evade tax in Australia. Since its entry into the Australian market in the mid-1990s, Glencore has attracted considerable controversy over its black lung and lead blood poisoning among its workforce, degradation of sacred Indigenous lands and tax evasion strategies.

The "Paradise Papers" disclosed that one of Appleby’s largest clients, Glencore was using huge cross-currency interest rate swaps between arms of multinational companies to enter into deals at unrealistic, non-commercial rates, then using the swaps as a way to shift profits from high-tax to low-tax jurisdictions.

It showed that on 12 April 2013 two Bermuda-based arms of Glencore – Glencore Capital and Glencore Finance (Bermuda) – changed $25bn in Australian dollars to US dollars through Glencore Australia Investment Holdings. Glencore Australia Finance, engaged in currency swaps with Bermuda-based Glencore Capital: for A$25m on 15 April 2013; and A$10m on 24 June.

Glencore, who took over XStrata in 2013, has operated in Australia for nearly two decades, with 24 mines in three mainland states and the Northern Territory. The company has attracted fierce criticism from Indigenous activists for its contamination of McArthur River where it has mined. The McArthur River mine in the Northern Territory, is one of the world’s largest zinc and lead mines and has been besieged by community opposition.

Glencore paid nothing in royalties to the Northern Territory government in 2015 and 2016 for McArthur River mining, by offsetting its capital investments to reduce its royalties bill to nothing.

Tax system is rigged for the giant multinationals

Whilst the taxation system is rigged for the super-rich individuals, whose net worth rises well beyond the millions of dollars, it is primarily there to enable the giant corporations to evade paying any tax. Despite the fact that trillions of dollars are hidden beyond the reach of taxation jurisdiction, Australia's ruling class in the form of the Business Council has the audacity to campaign for further reduction of company tax.

These trillions are kept out of sight, locked away by the capitalist rulers, and workers are told that cut backs to health care, education and pensions are needed to balance the government budget. The "Paradise Papers" confirm that the capitalist economic system we live under is bankrupt as far as the working class is concerned. It is the workers who create value - surplus value - and the capitalist class skims it off, demonstrating the fact that capitalists are parasites, who are not necessary for human development and production.
 

 

No 'Paradise Lost' for multinationals' tax evasions
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No 'Paradise Lost' for multinationals' tax evasions

 

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