Dodgy tax deals by uranium companies in Africa: Paladin under investigation
Advocacy group ActionAid claims poor countries are losing more than $130 billion in tax revenues a year by giving generous tax breaks to big companies, including Australian miners. There are about 240 Australian mining companies with operations in Africa.
Perth-based uranium miner Paladin Energy, came under scrutiny for its tax arrangements in Malawi where it runs a mine in Karonga. A report by the group Norwegian Church Aid alleges there are discrepancies between Paladin’s reported tax and its tax paid. It also alleges other payments by Paladin in Malawi are lower than the company reports.
Paladin has subsidiaries registered in Mauritius and the British Virgin Islands, both tax havens. Last year’s annual report showed the company accumulated losses that mean it will need to make profits totalling $208 million in Australia before paying any tax.
Tax man takes scalpel to energy and resources firms http://www.theage.com.au/national/tax-man-takes-scalpel-to-energy-and-resources-firms-20130705-2phat.html July 6, 2013 Georgia Wilkins The Tax Office will open 60 cases of suspected tax dodging by Australian and international companies amid global pressure to crack down on profit shifting.
The investigations will add to the 26 cases of offshore restructuring already under review
by the government body.
Under scrutiny are companies that deliberately restructure their business to route profits through low-tax jurisdictions or tax havens to avoid paying higher taxes in Australia, often through the use of post box companies or marketing hubs that have little real substance.
”The government has given the ATO a further appropriation of money to do more about this restructuring risk,” Deputy Commissioner Mark Konza, who is heading the ATO’s new taskforce into offshore tax schemes, said.
While mining companies are not a deliberate focus, Mr Konza said they made up a third of cases due to their size.
”Mining has been very profitable in the last decade,” Mr Konza said. ”They’re still making good profits, and of course the question arises, well, is there some way we could pay a lower portion of tax on these profits?”
The government’s latest effort to crack down on corporate tax cheats comes as the Organisation for Economic Co-operation and Development, non-government organisations and the African Development Bank call for greater transparency around multinational resources companies that are operating in poor countries.
There are about 240 Australian mining companies with operations in Africa.
Advocacy group ActionAid claims poor countries are losing more than $130 billion in tax revenues a year by giving generous tax breaks to big companies, including Australian miners.
”We know Australian miners are benefiting from these deals,” said Mark Chenery, head of campaigns at ActionAid Australia.
”In most cases, these are backroom deals signed directly with politicians with little or no parliamentary scrutiny.”
Perth-based uranium miner Paladin Energy, came under scrutiny for its tax arrangements in Malawi where it runs a mine in Karonga. A report by the group Norwegian Church Aid alleges there are discrepancies between Paladin’s reported tax and its tax paid. It also alleges other payments by Paladin in Malawi are lower than the company reports.
A Paladin spokesman said the company was ”fully aware of the report and we strongly dispute all the claims made in the report”.
Paladin has subsidiaries registered in Mauritius and the British Virgin Islands, both tax havens. Last year’s annual report showed the company accumulated losses that mean it will need to make profits totalling $208 million in Australia before paying any tax.
Development groups are calling for Australia to introduce disclosure laws that would force companies to report what they pay governments in every country where they operate.
Such laws have now been passed in the US, European Union and Canada.
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