ATO reveals corporate tax increase of 20% in 2016-17
The ATO has revealed that 2,109 corporate entities paid a total of $45.7 billion in taxes in 2016-17, an increase of $7.5 billion or 19.6 per cent on the year.
ATO’s corporate tax data, released on Thursday, shows that the 2,109 large companies operating in Australia earned $1.7 trillion in gross income in 2016-17 and paid taxes equalling almost two-thirds of total company income tax payable for that year.
“The transparency report reflects a bounce-back in the energy and resources sector, which led to a strong increase in tax revenue from the large corporate sector overall,” second commissioner Jeremy Hirschhorn said.
Compared with the previous year, there were increases in tax payable for all three ownership segments. Australian public entities contributed the most to the increase ($6.4 billion), followed by foreign-owned entities ($626 million) and Australian private entities ($429 million), the ATO revealed.
“In coming years, the full effect of the Multinational Anti-Avoidance Law (MAAL) will flow through as multinational companies book billions more in sales locally,” Mr Hirschhorn said.
“Increasingly, the data will also reflect our approach to resolving past matters in requiring future compliance to be locked in.”
Moreover, the ATO revealed that the tax gap for large corporation also dropped to 4.4 per cent in the 2015-16 income year, from 5.8 per cent in the previous year.
In terms of the Petroleum Resources Rent Tax (PRRT), the Tax Office reported a net tax gap of 2 per cent in 2015-2016.
“Today we can also confirm the estimated level of compliance of large corporate groups has increased from 94 per cent to over 95 per cent, the vast bulk of which is paid voluntarily,” Mr Hirschhorn said.
“While the level of performance is already world-leading, we are confident our strategies, in conjunction with new laws and resources, will result in continued improvements over the coming years.”