The parent company of Optus, Singapore Telecommunications (Singtel), has once again reported no corporate tax payment despite generating over $8.2 billion in income from Australian customers. This revelation comes as the latest figures indicate a growing reliance on the mining and banking sectors to bolster the federal budget.
The Australian Tax Office (ATO) released its annual corporate tax report today, detailing the income and tax contributions of the nation’s largest companies. In the 2023-24 fiscal year, over 4,000 firms contributed $95.7 billion in taxes on a combined income of $3.3 trillion. However, Singtel was notably absent from the list of taxpayers, marking the fourth consecutive year it has declared substantial income without paying corporate tax.
Singtel and Other Non-Tax Paying Giants
Singtel’s tax-free status persists despite its significant earnings, echoing a pattern observed since it last paid tax in the 2019-20 fiscal year. During that period, the company reported $9 billion in income, $181.8 million in taxable income, and paid $43 million in taxes.
Global meat producer JBS also reported no taxable income on $19.7 billion in earnings, continuing a trend of minimizing tax obligations. Meanwhile, Qantas, which led the non-tax paying companies in 2022-23, paid a modest $8 million in tax on $21.6 billion in income for 2023-24.
Other prominent firms, including Netflix, Transurban, and Virgin Australia, similarly reported substantial incomes without corresponding tax payments. The ATO noted that 28 percent of large firms did not pay tax this year, citing legitimate reasons such as poor trading conditions or the utilization of previous tax losses.
Mining and Banking Sectors Bolster Tax Revenues
In contrast, the mining and banking sectors have emerged as significant contributors to the federal budget. Windfield Holdings, involved in lithium development, joined the ranks of top taxpayers for the first time, paying $2.6 billion in tax on nearly $10 billion in income.
Rio Tinto was the largest taxpayer, contributing $6.3 billion on an income of $52.8 billion, marking a $500 million increase from the previous year.
BHP Group paid $6 billion on $62.5 billion in income, with its associated company, BHP Iron Ore, contributing $2.1 billion in taxes on $10.3 billion in income. Other notable contributors included Fortescue, Glencore Investments, and Woodside.
Shifts in Tax Contributions and Compliance
Despite a slight decrease in total tax paid by large corporations from the record $97.9 billion in 2022-23, the mining and energy sectors remain pivotal. The drop in tax revenue from these sectors, attributed to lower commodity prices, was partially offset by increased taxes from oil and gas firms, which rose to $10.4 billion.
The Petroleum Resources Rent Tax (PRRT) collections fell to $1.5 billion, despite a record number of companies paying the tax. The federal government’s PRRT reforms, aimed at accelerating tax collections, began this year. However, factors such as falling oil prices and project decommissioning affected the overall tax intake.
Assistant Tax Commissioner Michelle Sams highlighted Australia’s high tax compliance levels, with 94.1 percent of taxes paid voluntarily and 96.3 percent after compliance actions.
“The data continues to demonstrate the high levels of compliance amongst our largest corporates, which is what the Australian community expects,” she said.
Tech Giants and Their Tax Contributions
Among technology firms, Atlassian led with a tax payment of $252.8 million on $6.2 billion in income, a significant increase from the previous year. Microsoft, Apple, and Google also made substantial tax contributions, reflecting the tech sector’s growing fiscal responsibility.
As the federal budget increasingly relies on specific sectors, the spotlight on corporate tax practices remains intense. The ongoing scrutiny of non-tax paying giants like Singtel underscores the complex landscape of corporate taxation in Australia.
Moving forward, the balance between encouraging business growth and ensuring fair tax contributions will be crucial for sustainable economic development.
