A new levy on digital giants like Google, Facebook and eBay is a step towards a fairer way of taxing
As Australia’s 20th-century tax principles struggle to deal with the 21st-century economy, a new proposal might finally be the solution to the problem, explains the University of Sydney’s Antony Ting in this crossposting from The Conversation.
The government is reportedly considering a new tax on the digital economy. While no details of the tax are available yet, the digital services tax recently proposed by the European Commission may give us an idea what the tax might look like.
In essence, the proposal will impose a 3% tax on the turnover of large digital economy companies in the European Union. Similar ideas have been suggested in the UK and France.
According the the ATO there were 732 companies (multinationals, public, private from multiple sectors) which paid no tax in Australia in the 2015-16 financial year.
Collectively, their income was more than $500 billion.
Take a look at the list here where some media companies do appear (not Google, Facebook or Ebay) > http://www.abc.net.au/news/201.....to/9236878
This is a much bigger problem than the usual suspects which are continually and conveniently (for some) mentioned.
If the likes of Google and Facebook were forced to direct their entire local revenue billing through the Australian entities rather than splitting billing of certain services offshore, via Singapore and Irish entities, I think you would find the revenue reporting and profit margins would be significantly increased.
As for a digital economy tax it’s total shite. Like any tax imposed on a service it will only be passed on in higher fees to cover the cost of the revenue shortfall and business cost in dealing with another tax collection point.
Our government needs to grow some larger nuts and reform access as a whole to the Australian market by offshore multinational entities and enforce a flat pay to play tax policy on revenue rather than profits.