RR Phantom
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 |  Subject: Idiotic OZschwitz Associate Professor Sharif As-Saber: Black economy a drain on tax take  Mon Apr 16, 2012 4:32 am | |
| THE answer to wilting tax receipts hampering efforts by the Treasurer, Wayne Swan, to bring the federal budget into surplus may lie in closer scrutiny of ''black business'' - illegitimate, illegal and informal transactions that slip through the tax net.
Australia's black economy could be worth up to 30 per cent of the nation's gross domestic product, according to new research. While that figure encompasses everything from illicit cartels and drug trafficking to internet piracy, researchers say one of the biggest components is tax evasion by multinational companies.
The researchers have highlighted ''transfer pricing'' - the manipulation of payments and invoices between Australian companies and related companies in tax havens to minimise tax - as a major drain on government revenue.
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Associate Professor Sharif As-Saber, the deputy head of the school of management at RMIT University, said such practices were ''almost beyond control'' due to poor global governance. He said multinational corporations were prone to black business practices, and in Australia mining companies ''are given too much freedom and power because of their money''.
Under pressure to deliver on its promise to balance the budget, the Gillard government this year released draft laws to strengthen protections against transfer pricing. It has also flagged a review of anti-tax avoidance laws.
The Taxation Commissioner, Michael D'Ascenzo, has been warning of a shortfall in corporate tax receipts since early last year, saying there was ''fragility'' in the system and singling out pricing as a key problem.
The Tax Office is seeking to use OECD methods to crack down on transfer pricing by determining if an Australian subsidiary of a multinational company is less profitable than it should be.
The government's proposed laws would increase the discretion of the Tax Office, by giving tax treaties the same authority as domestic laws.
Professor As-Saber, who is currently compiling an estimate of the black economy in Australia and New Zealand, said previous estimates had valued a segment of Australian black business at 15 per cent of GDP, but he believed that globalisation and rapidly advancing technology had increased the value and volume of the unregulated economy since that estimate was made.
''I think that all governments around the world are lagging behind and Australia definitely is not an exception,'' he said.
The Australian Institute of Criminology released three papers on the black economy in February, highlighting that trade payments were increasingly used to conceal money-laundering.
Australia was one of only two countries of nine studied that did not subject the international movements of ''bearer negotiable instruments'' - promissory notes, traveller's cheques, money orders and postal orders - to the same reporting requirements as cash.
Read more: http://www.smh.com.au/business/black-economy-a-drain-on-tax-take-20120415-1x1ng.html#ixzz1sBrWlltG
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