Tax transparency can work for companies if they do it right

The Tax Transparency Package released by the European Commission last week comes amid global moves by the G20 and others to make it more difficult for companies to avoid paying their fair share of tax. But as serious information sharing plans are hammered out between nations around the world, the Australian government is considering protecting the privacy of some of Australia’s richest people, diluting transparency measures aimed at private companies.

More than naming and shaming needed to stop corporate tax avoidance

The report of the Senate Economics References Committee inquiry into corporate tax avoidance comes with the subtitle – “You cannot tax what you cannot see”, with a strong focus on increased transparency. The majority of the 17 recommendations in the interim report relate to improved transparency of the tax affairs of corporate taxpayers. This is a significant step in the right direction. Recent experiences in the war on corporate tax avoidance both in Australia and overseas confirm that “information is power”. Most notably, we have seen increased transparency changing the behaviour of multinational enterprises as well as inducing governments to act.

Government cracks down on tax avoidance through foreign investment rules

The Turnbull Government announced yet another measure aimed at addressing tax base erosion and profit shifting, placing additional requirements on new foreign investment under the existing national interest test. In the last 12 months Australia has seen various reforms within the tax system. However, this latest initiative is a shift as it links Australia’s tax regime with its foreign investment regime. It sends a broader signal to the market that Australia will look beyond the collection of tax revenues to a consideration of national interest.

Tariff-tax reforms and market access

Reducing tariffs and increasing consumption taxes is a standard IMF advice to countries that want to open up their economy without hurting government finances. Indeed, theoretical analysis of such a tariff–tax reform shows an unambiguous increase in welfare and government revenues. The present paper examines whether the country that implements such a reform ends up opening up its markets to international trade, i.e. whether its market access improves. It is shown that this is not necessarily so. We also show that, comparing to the reform of only tariffs, the tariff–tax reform is a less efficient proposal to follow both as far as it concerns market access and welfare.

Tax principles and tax harmonization under imperfect competition: A cautionary example

This paper shows that under imperfect competition, the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle. In a standard model of imperfect competition, while harmonization always makes at least one country better off, and may be Pareto-improving, when taxes are levied under the destination principle (which currently applies in the European Union), harmonization of origin-based taxes (as recently proposed by the European Commission) is certain to be Pareto-worsening when the preferences in the two countries are identical, and is likely to be so even when they differ.

Counting the cost: Estimating the number of deaths among recently released prisoners in Australia

TO THE EDITOR: Kinner and colleagues described the high proportion of deaths among recently released prisoners in Australia...

Thin capitalisation – the multinational tax avoidance strategy the budget forgot

We have already seen major amendments to Australia’s tax regime to tackle base erosion and profit shifting (BEPS). Several more significant measures were announced in the federal budget, most notably the diverted profits tax, aimed at multinationals which shift tax to a lower taxing jurisdiction. Yet to date, a very simple tax minimisation strategy has been largely ignored in the ongoing reforms and was ignored in the federal budget. Excessive debt loading is a problem that not been afforded the same attention as other aggressive tax planning strategies adopted by multinationals.

Fundamental Tax Legislation [24th Edition]

Fundamental Tax Legislation 2016 contains the essential provisions from the primary legislation that affects Australia's taxation system. Updated and expanded for changes which occurred in 2015, this volume is an indispensable reference for undergraduate and postgraduate students of taxation. The Year in Review section has been updated to summarise the main legislative developments in taxation over the previous 12 months, a listing of the passage of tax related legislation during the last year and the inclusion of reference statistics (such as CPI quarterly figures and individual tax rates for residents and foreign residents). Also fully updated and revised to reflect the changes in 2015 is the Tax Rates and Tables section, which contains an accessible summary of the main tax rates and tables that students will need to refer to for their tax studies.

Urban growth dilemmas and solutions in China: Looking forward to 2030

China’s urbanization and industrialization are occupying farmland in large amounts, which is strongly driven by land finance regime. This is due to the intensified regional/local competition for manufacturing investment opportunities that push local governments to expropriate farmland at low prices while lease land at high market value to property developers. The additional revenue obtained in this way, termed financial increment in land values, can drive local economic growth, and provide associated infrastructure and other public services. At the same time, however, a floating population of large numbers of inadequately compensated land-lost farmers, although unable to become citizens, have to migrate into the urban areas for work, causing overheated employment and housing markets, with rocketing unaffordable housing prices. This, together with various micro factors relating to the party/state’s promotion/evaluation system play an essential role leading to some serious economic, environment and social consequences, e.g., on migrant welfare, the displacement of peasants and the loss of land resources that requires immediate attention. Our question is: whether such type of urbanization is sustainable? What are the mechanisms behind such a phenomenal urbanization process? From the perspective of institutionalism, this paper aims to investigate the institutional background of the urban growth dilemma and solutions in urban China and to introduce further an inter-regional game theoretical framework to indicate why the present urbanization pattern is unsustainable. Looking forward to 2030, paradigm policy changes are made from the triple consideration of floating population, social security and urban environmental pressures. This involves: (1) changing land increment based finance regime into land stock finance system; (2) the citizenization of migrant workers with affordable housing, and; (3) creating a more enlightened local government officer appraisal system to better take into account societal issues such as welfare and beyond.