How Large Businesses Avoid Paying Tax On Their Revenue

A common theme in ATO (Australian Taxation Office) messages this year has been that big businesses are generally doing the right thing. And what they are doing- they’re lodging income tax returns accurately and paying the correct amount of tax. However, the thing that Interestingly, corporate tax avoidance is not at all present in their narrative.

However, having observed that the issue of corporate tax avoidance back into the media spotlight once again.

In this article, we’ll discuss things in two parts. First, let’s talk about inflated deduction claims by individual and businesses. Then, we’ll look at corporate tax avoidance where businesses are using a multitude of things in order to avoid paying tax on their revenue. 


What are the Types of Tax Gaps? 

1.Individual Tax Gap: Recently, senior ATO figures indicated that what they call the individual tax gap. The Australian taxation office reported that there was a “tax gap” of $2.5 billion of over-claimed work-related deductions on individual tax returns last year.

2. Corporate or Business Tax: According to the report, out of just 1400 big businesses, the tax gap was worth $3.5 billion. 

There is no arguing with the fact that the “tax gap” for just 1400 big businesses is more money than the tax gap for 12,000,000 normal Australians. And, this doesn’t mean that this will even take into account corporate tax dodging – which the ATO could involve Billions of hidden and un-taxed corporate dollars that the taxation office hasn’t even figured out.

How To Move Forward?

Both individuals and businesses, all Australians should pay their fair share of taxes, allowing the numbers game to come into play. It would be better if the corporate tax avoidance should be put back into practice for both the ATO and Federal Government.

Needless to say, individual working Australians is an easy target and collects a bit more taxes. However, when it comes to cracking down on the richest companies, it means a lot more potential tax gained by the ATO. In addition, it clearly defines the fact that businesses pay their tax on revenue that they generate in Australia. And, the Government ends up with more revenue in their budget in order to fund projects the benefit all Australians.

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