PERTH (miningweekly.com) – Australia has revealed new measures and penalties to ensure large multinational companies pay their "fair share" of taxes.

Delivering the 2015 federal Budget, Treasurer Joe Hockey said on Tuesday that the government was committed to greater transparency in the commercial dealings of large multinationals to prevent tax avoidance through tax loopholes and profit shifting.

Hockey said that the government would work with businesses to develop a code on greater public disclosure of tax information by large corporates. The voluntary code would highlight companies that were paying their fair share of tax, and would also discourage companies from engaging in aggressive tax avoidance.

“I have written to the Board of Taxation asking them to lead the development of this transparency code. The Board of Taxation will provide a business and broader community perspective to the development of a voluntary corporate disclosure code.”

Hockey said the government would prefer more companies, particularly large multinationals operating in Australia, to publicly disclose their tax affairs, and added that in developing the code, they would need to consider what information was disclosed and how it was disclosed.

“Some Australian companies are already leading the way, by voluntarily disclosing taxation information to the community. As listed entities, Australian and overseas corporates have strong public disclosure obligations. We want to encourage greater compliance and support for our taxation system and the government is conscious of maintaining our voluntary, self-assessment taxation system.”

The Treasurer said that the government would monitor progress and evaluate the results of the voluntary code process and would consider further changes to the law if required.

Meanwhile, Hockey also revealed that penalties for companies found to be breaking the tax law would be equal to the tax owed, plus interest.

The Minerals Council of Australia had come out in defence of the resource industry’s tax rate, pointing to a research paper compiled by Professor Sinclair Davidson, which indicated that the mining industry paid a significant amount of tax, which, in fact, was close to the statutory rate of 30% of its taxable income.

“The view that the mining industry is under-taxed is not supported by data published by the Australian Taxation Office – the government agency that administers the tax system and actually collects the tax revenue,” the report read.

Davidson said that the data showed that mining paid A$13.6-billion in net company tax in 2012/13.  Despite accounting for less than 1% of liable companies, mining paid more than 21% of corporate tax (second after the financial industry). Since 2000/1 net company tax receipts from mining had increased 7.8 times, while overall net company tax receipts had risen just 2.4 times.

Davidson's paper further indicated that mining paid a higher average effective tax rate than the Australian average, by a significant margin. 

“The argument that mining tax rates are lower than that of most (or even many) other industries is simply not true,” Davidson concluded.