"Let me be very clear: a tax cheat is a thief," said Joe Hockey
at a speech in Washington before meetings of G20 finance
leaders in October. Australia's Treasurer made his position on
tax evasion clear during the country's tenure as president of
the G20, emerging as a strong leader against corporate tax
|Joe Hockey is a
new entry this year
Hockey's comments came after the release of the first
Luxembourg Leaks documents in November.
"Wherever companies engage in extraordinary activity in
order to avoid tax, we will go after them. We have an
obligation to every taxpayer in Australia to ensure that
everyone that earns profits in Australia pays tax in
Australia," said Hockey.
Australia has been particularly vocal in the crackdown on
tax evasion. Though it has sophisticated transfer pricing and
taxation laws, laws have a difficult time keeping up with
rapidly changing technology and innovation. Hockey has used his
position to ensure Australia's continued tax development.
"We remain dissatisfied with the tax outcomes some
multinationals are able to manufacture, which creates an uneven
playing field for smaller businesses, and it unfairly shifts
the tax burden on to others," Hockey said in September.
Despite these sophisticated transfer pricing rules,
Australia's tax planners faced multiple challenges in 2014. In
October, Australia's Tax Justice Network published a
controversial report claiming that Australian corporations were
evading tax. Though the report methodology was questioned, the
ATO is now investigating the Australian operations of several
of the world's largest technology companies, including Apple
and Google. Hockey responded by pledging government resources
to end tax evasion.
Domestically, Hockey has overseen the repeal of two divisive
indirect tax policies – the carbon pricing mechanism,
repealed at the third attempt in July, and the minerals
resource rent tax (MRRT) aimed at mining activity. Though the
indirect taxes had environmental benefits, they were contested
hotly by industry lobbyists and caused havoc for former prime
minister Julia Gillard.
Most recently, Hockey hinted at the possibility that
Australia might follow in the UK's footsteps on a new
initiative dubbed the 'Google tax', which will levy a 25% tax
on multinationals who evade taxes by shifting income overseas.
Tax officials from Australia have reportedly met with their
British counterparts to learn more about the proposed tax,
which was published as part of the UK's Draft Finance Bill in
In a poll conducted by ReachTel of constituents in North
Sydney, 72% expressed that they believed the Coalition was not
doing enough to stop corporate tax evasion. The popularity of
reforms to stop tax evasion will ensure that pressure remains
on Hockey to continue his work in the area. Though 2014 marked
the completion of only his first year in office, Hockey is
poised to continue to shape the focus of Australia's tax
reforms, especially considering the promise of a White Paper on
Taxation in 2015.