In the June issue of Vanguard an article titled Taxation system works for the rich exposed the extent of tax minimisation by the corporate monopolies, with some paying no tax at all. There was mention of the secretive use of overseas tax havens to dodge the scrutiny of the Australian Taxation Office.

 

A report has just been released by the Uniting Church which examines the use of these tax havens by subsidiaries of the top 100 companies listed on the stock exchange. The report was written by Mark Zirnsak, the director of the Uniting Church Justice and International Mission Unit.

 

The report, titled Secrecy Jurisdictions, the ASX100 and Public Transparency, found that more than 60 of the top 100 companies had subsidiaries in tax havens such as the Cayman Islands, Switzerland, Luxembourg, the British Virgin Islands, Bermuda, Mauritius, Jersey, the Cook Islands, the Seychelles, and in low-tax jurisdictions such as Hong Kong and Singapore.

 

Many of these subsidiaries conduct almost no commercial activity, and exist only to avoid or minimise taxes. “These are places that fail to meet international standards on transparency, on anti-money-laundering laws, and on tax law co-operation,’’ said Mr Zirnsak. 

 

News Corporation, Westfield and the Goodman Group were listed as operating more than 50 subsidiaries each in a number of tax-free or low tax countries.

 

The Commonwealth Bank was also listed. A subsidiary of the bank, Burdekin Investments, operates out of George Town, capital of the Cayman Islands. Its headquarters is Ugland House, home to thousands of so-called ‘post-box companies’ taking advantage of local tax rules.

 

In its 2012 annual report, Telstra confirms 20 subsidiaries registered in tax havens – 11 in the British Virgin Islands, four in Bermuda, four in Jersey, one in Mauritius and one in the Cayman Islands.

 

Information on the identity of corporate tax dodgers and the extent of the scams was recently leaked to the International Consortium of Investigative Journalists. It came from two companies dealing in taxation law - Commonwealth Trust Ltd in the British Virgin Islands and Portcullis TrustNet, based in Asia.

 

According to the Saturday Age, this information has fingered more than 500 Australians with connections and involvement with tax haven rorts. A special investigating task force, Project Wickenby, has been set up combining the Australian Crime Commission, the Federal Police and the Australian Tax Office.

 

It is a smokescreen. Its purpose is to round up a few somewhat petty criminals and con artists and give the appearance of cracking down on tax avoidance. It complements the passing of parliamentary legislation to ‘close tax loopholes’ – they’ve been doing that for decades and the rich still get away with it.

 

You can bet that none of the top 100 companies, the multinationals, the corporate monopolies and big banks, or the media monopolies will be investigated, hauled into court and their bosses carted off to jail. The ‘legal’ tax haven subsidiaries will continue undisturbed and the profits will keep rolling in.

 

In a stagnating economy, State and federal governments are cutting services and dumping workers. They blame falling tax revenues for the austerity measures being imposed on the people. They dare not try to collect even the legitimate taxes that should be levied on the monopolies, let alone impose a progressive taxation system to spread the burden in a fairer way.

 

These parasites are bludging on the working people who get less and less for the taxes they have to pay. Workers may not like paying taxes, but they hate bludgers who get away with not paying any.