Uber Australia is broke: 'We don't pay tax because we don't generate revenue' The Netherlands is the natural place for Uber to bill its Australian customers, Airbnb only lives in Ireland because it's got the best skills pool, and Bermuda is beloved of Chevron merely because it has a good maritime safety record. Those were some of the more amusing outcomes of yesterday's Australian Senate hearing into …
Technically we choose to give money to the government because we vote for a government that wants to collect tax to spend money on things. A candidate that promised to completely shut down the government and stop collecting tax probably wouldn't get very many votes. People do want the government to spend money on some things, the argument is about how much, and on what.
Technically we choose to give money to the government because we vote for a government that wants to collect tax to spend money on things.
My father was paid compensation by the German government as he had been a slave labourer under that country's National Socialist government. The payment was made on the proviso that it not be assessed for income tax purposes. The Australian government took a different view and made my father pay income tax on the compensation payments.
I suppose "technically" had he not paid the ATO that money he would be deemed by some commentards here today that he was "stealing" from the government.
@codejunky
We risk being seriously diverted from the topic but what is the point of all this if not to discuss and debate with one another?
I would say that there are only two ways that one could consider tax to be "theft".
The first is on legal grounds. This is, obviously a non-starter as it is illegal not to pay your taxes (as you note). You might complain the law is unfair but that does not make it void and inapplicable. The constitutions of both Australia and the United States - as upheld by the High and Supreme courts respectively, specifically authorise the government to levy and collect taxes. That is the end of that argument - collecting taxation is not theft from a legal perspective because the Government is explicitly authorised to do so by the highest law in the land, as affirmed by the highest court in the land. End of story.
So, given that taxation cannot be considered theft on legal grounds, on what other grounds can one argue? The answer is: moral grounds, and this is where the debate becomes more interesting because the moral argument actually allows debate where the legal one does not.
So what, then, is the moral grounds for asserting that taxation is theft?
The only argument that I can see to have any merit at all is that a person is (morally) entitled to their wage in the amount that the job pays. That may seem reasonable but there is an underlying assumption hiding just below the surface that must be understood, which is that the amount of money people earn is the same as what they deserve.
The one is implicit in the other - if you have a moral right to $X then getting less than $X is being shortchanged and, morally, wrong. And that argument just cannot hold up because it assumes that each and every person has some value that should be recognised in the form of payment of a specific, morally-justified amount.
So, the unavoidable, logical premise necessary to go from there to the conclusion that "tax is theft" is that everyone is, somehow, paid exactly what they are morally entitled to and neither a penny more nor less.
Now, you may well assert that but there is no way for you to prove it and so I might just as easily assert that that is not the case, thus leaving us with only the legal argument available to in any way settle the issue.
And, legally, tax is not theft.
The constitutions of both Australia and the United States - as upheld by the High and Supreme courts respectively, specifically authorise the government to levy and collect taxes.
However, the government is not authorised to levy tax on all income. It is widely recognised that certain income is not taxable; compensation paid by an insurance company for injury for example. It is certainly the case that the compensation paid to Germany's slave labourers is not in any reasonable sense:
salary and wages, interest from bank accounts, dividends and other income from investments, bonuses and overtime an employee receives, commission a salesperson receives, pensions, or rent.
which is what the ATO defines as taxable income.
From the 1890s to the 1970s the Queensland Government managed the wages and savings of Aboriginal and Torres Strait Islander Queenslanders since they were considerd incapable of managing their own finances. A small portion of their wages were given to them and the remainder deposited in a bank account. Often, Indigenous people didn't know what was happening to their money. Unlike the rest of the community, many had no control over their own money, thier earnings being spent for them by the government employee betters.
Government officials took money out of these accounts to pay for things like clothing, travel fares, postage, medical and dental expenses and purchase orders for workers or their families. Indigenous workers were generally not told about this. Despite the aborigines receiving far less than their earnings, the Queensland government (and their employees no doubt) found plenty of use for the "excess" income.
During the period 1975-1986 aborigines working for the Queensland government were paid less than the legal award. Amazing isn't it that a private business doing that would have been breaking the law!
It's all very well saying that government stealing is OK because it's legal, but that does not mean it isn't theft.
@ dan1980
"We risk being seriously diverted from the topic but what is the point of all this if not to discuss and debate with one another?"
I am happy to discuss as long as you dont mind. It is interesting to hear another perspective on the same issue. And you make it very interesting by boiling it down to 2 options- morals and legality.
I dont believe in morals in an absolute sense. Morals are very flexible, very fluid and can easily be manipulated. Morals do not stand still nor are they the same for people living together never mind over large populations. Almost anything can be justified and when an argument falls to morals it risks lacking good reason.
So of your 2 options I find legality to be the easiest and most amusing. Who sets the law? What is this creator of the law? It is the 'might is right' rule where the law of the land comes from the ones with the power to apply it (physical might). The UK is fairly stable but we have seen the relevance of law in the middle east where you pay your dues to the one in charge that day. The mafia made their own laws and while this country is pretty civil this rule still stands.
Someone above put up a link over the definition of theft. The only thing defining tax as different from stealing is the legality issue which as I point out law is might. Simply stealing is ok as long as nobody has the might to challenge it. Not a bad definition if your in charge.
As far as checks and balances of law being the highest law of the land, it doesnt exist. As recently proven over the developed world the idea of courts being in charge has been challenged by the immediate threat of terrorism where freedom and liberty have been pushed aside for militarised operations against populations all at a higher cost (to the tax payer of course). Recently the HMRC in the UK has the right to take the money before you have the opportunity to prove they are (as is often the case) wrong. The above experiences of Pompous Git sounding very theft like but for the only defence of legality.
It sounds a lot like saying- it looks like a duck, it walks like a duck, it quacks like a duck, but for just this one special case we will call it a turtle.
@codejunky.
I'm not really sure why you're being downvoted here. Goes with the territory, I suppose.
As you say, morals are flexible and fluid so appealing to them does not really get us any closer to agreement.
We both agree that this leaves us with the legal argument.
It is simply a fact that, at least in Australia and the US, our constitutions explicitly grant the Government the power to levy and collect taxes, but you ask:
"Who sets the law? What is this creator of the law? It is the 'might is right' rule where the law of the land comes from the ones with the power to apply it (physical might)."
These are important questions, but irrelevant to the primary question of legality because they are going back to moral issues. Essentially, you are asking: what is the basis for law in the first place? This is a deep question to be sure, but doesn't impact the determination of whether "tax is theft" or not.
You might counter that if there is no proper basis for the law then it is not really a law. Well and good, but if so then what is the basis for any law? And if there is no basis for any law then how can anything be considered to be "theft"?
That is the crux of the issue because saying that "tax is theft" is logically impossible. If you accept the legal framework then tax cannot be theft because it is authorised by law. But if you reject the legal framework then "theft" itself ceases to have any legally-defined meaning and so you are right back at arguing about morals.
Now, I accept that the situation in the UK is different from that in the US and Australia as you don't have a codified 'constitution' as we do. As a much older country, you instead have the built-up legal traditions and conventions that have been accumulated and refined over the centuries that play something of the same role.
But the fundamental logical problem remains: either you accept those conventions or you don't. You can choose to accept some and not others, thus accept the laws on theft but not on taxation but you do so based on your personal moral and philosophical arguments rather than legal ones.
@ dan1980
"I'm not really sure why you're being downvoted here. Goes with the territory, I suppose."
Np, up votes or not it is the discussion which contributes. And I am enjoying this discussion.
As for the tax vs theft, I guess you could look at it from a moral point of view (which as we agree is a poor argument) but also from an action point of view. It is exactly the same action with the same consequences but treated differently. Essentially it is ok for one to do it but not anybody else. With the increasing move to enhanced stealing or more efficient stealing by expanding the rules to include not only tax evasion but also the legal practice of avoidance making the perfectly legal and intentional right to not give more than is due illegal. The law seems to be becoming as flexible as morals (especially as they become more reactionary and emotional) which sounds like a regression to a time before greater democracy and equal rights.
@ codejunky
As it happens, I do not accept that looking at the issue from a moral viewpoint is a poor argument. There are two alternative premisses here: either you accept the belief that you have inalienable property right in your self, or The State has an inalienable property right in your self. The former premise is freedom and the latter slavery. If you accept the premise that you possess the right to your body and the fruits of its labours, then taxation, forcible removal of your property, is theft. If the latter, then The State has the right to go even so far as to determine the "proper" amount of revenue raising its slaves engage in as in the example I gave where the ATO forced me to pay interest on money I owed them even though they and I knew I would never earn the amount they had determined.
[aside] The chief reason I had decided to wind up my business was in order to build my dream home. It cost me ~$AU170,000 and will shortly be put on the market for ~$AU490,000. Only 50% of capital gains are taxed here in the Land of Under, thus I would pay ever so much less tax than I would have earning $AU320,000. But since it is my principle place of residence I don't even have to pay capital gains tax. Had I earned the money to build to the original builder's quote and borrowed from the bank the I would also have needed to pay income tax and bank interest. It's a great system if you can accumulate sufficient capital and understand how the economy works. Not so great for wage-slaves.
I miss being born English working class like I'd miss an extra hole in my head. [/aside]
@ Pompous Git
"As it happens, I do not accept that looking at the issue from a moral viewpoint is a poor argument."
I know not everyone agrees and some people feel really upset when I suggest that morals are incredibly flexible. I dont disagree with anything you just said about where you feel the rights are but throughout history people have changed that opinion (morals) on the flimsiest of reasoning or the promise of a utopia. If the people could have foreseen the disaster of communism for example (especially in places like china and N Korea) would people have willingly gone along with it knowing their descendants would be left to die to allow the leaders luxury?
Right now we have the same moral problems where companies are being blamed for legally not paying over the odds in tax, so the gov is doing their best to ruin their reputation and gain support for sweeping new powers of taxation. The best part is the people dont realise they are voting for more tax on themselves and less jobs- two things they demand. Just as they demand both freedom and absolute security, so freedom has been removed to improve security but people still morally believe they are right no matter how much harm they self inflict.
Worryingly people assume they are moral when they demand more tax, but only on people richer (or doing other things) to them. People can morally argue that tax is a good or a bad thing, and thats a discussion nobody can win as it is subjective. But as for as the action goes both stealing and taxation is exactly the same thing. It is just the name that is different.
@nijam
"Tax is theft."
Only as much as driving down the road is trespassing, which is to say not at all.
I wish I had to pay less tax and I really wish that my money didn't get wasted the way it does but I pay my taxes and willingly as anyone can - and I mean that because I believe very strongly that we should all contribute to help everyone out because there's enough to go around.
I am fit and healthy and will never have children but I do not begrudge my money being used to pay for health care are education, in fact I wish more of it was. I wish it was spent a little more wisely and with more of a concern to the fact that this money being spent by government is not 'government money' but money that the citizens have given so that it can be used to improve the well-being of the country as a whole.
Further, the idea that taxes are 'theft' ignores a very simple truth: that, but for many services and elements of infrastructure that tax dollars provide, many of us would be able to earn the money upon which our taxes are calculated.
In that way, you can almost think of taxes as the repayment of a loan - if you drove to work, for example, you most likey used a few public roads which wouldn't be there but for taxes. But it extends far beyond that because services provided by tax dollars underpin a great deal of our society whether we understand it or not.
Taxes are us paying out share of what it costs to run the society we all live in.
And if you think you made all your money 100% on your own then perhaps consider the position you would be in if there was no police force and no public justice system. Or public schools. Now, maybe you went to a private school but that school would have received money (they all now) anyway. More subtly, private school fees are moderated by the fact that one can use a public school instead. What do you think school fees would be if there were not public schools?
The result would be you going to a less-accomplished school which may have resulting in worse grades and reduce university prospects.
Maybe your family were wealthy enough to have paid whatever it took to give you a first-class education - luck for you - but in your enterprise you now have to hire people so you want a pool of intelligent, skilled workers - something made easier by tax-funded education. Likewise, you will earn more the less your frequently your staff are unwell, thus benefiting from whatever tax-funded Healthcare is available.
In short, if you wish to consider tax to be "theft" then so is utilisation of any tax-funded service.
(Apologies for spelling/grammar as I am so tired I literally am having trouble keeping my eyes open. d.)
@ dan1980
"Only as much as driving down the road is trespassing, which is to say not at all."
I was going to leave it with my last comment on tax but this really made me cringe. Public road with the express purpose of public being able to transport themselves around. Removing a privately owned road from its owner so it can now only be used by an exclusive group for their purposes under the threat of force is the nearest a road analogy seems to work.
"I wish I had to pay less tax and I really wish that my money didn't get wasted the way it does but I pay my taxes and willingly as anyone can"
As anyone can? its either willingly or not. If not why do you pay it? Is it because of a threat of force being used against you? Yup. And while they waste it what can you do about it?
"Further, the idea that taxes are 'theft' ignores a very simple truth: that, but for many services and elements of infrastructure that tax dollars provide, many of us would be able to earn the money upon which our taxes are calculated."
Which is fine justification for stealing but this does not invalidate the theft argument, it just appends a 'robin hood' view to it. The problem with such robin hood views is they are easy to apply to spend more money but people ignore the real world effects of stealing more to provide more, moving from necessity to bribe. While an amount of public services is beneficial this mark has been left in the dust and the idea used as a stick against anyone wanting to remain at a balanced point (i.e. people always want more for less).
"In that way, you can almost think of taxes as the repayment of a loan"
Very twisted. They take money off the people to provide ever reducing services via monopolies with extreme variations of quality to which we are paying back purely for the pleasure of being alive. We are being taxed for being alive. That is it. The state takes from us because we were born so they dont have to earn it, they are a huge welfare dependant! That is why it smarts when they submit claims for duckhouses, moats and porn on our earnings.
"Taxes are us paying out share of what it costs to run the society we all live in."
To a point this is right and a good justification of public services. But beyond that point it is taking to prop up whatever daft idea the gov wants to spend on. Often increasing their fiefdoms and so their power to command more money (and as such demand).
"In short, if you wish to consider tax to be "theft" then so is utilisation of any tax-funded service."
How then can we avoid the public system? Hmm. The gov have their hand in all water supplies, energy, education etc. On top of that if you dont provide these government sanctioned services to your child you are automatically attacked by said monopoly government as unfit and the child removed so they are forced to use such services. Quite a racket based on your loan comment.
"I'm all for [Uber] shaking up incumbents, as long as they are playing on a level field."
Them or anyone else. Uber is a taxi-booking company. So they use technology to enable their business? So what? Banks, financial services, insurance, countless other industries use innovative technology to enable their business. That doesn't make them technology companies. Asking for an exemption in this respect is taking the piss.
As to the profit being exported to Netherlands, i don't see that either. Punters are not paying X to the cab driver for the ride and Y to Uber Netherlands for a booking fee, they pay X+Y to Uber Australia who then passes on X to the driver. Under what criteria does Uber Aus pass on Y to Uber Netherlands, if it's not profit-exporting for tax avoidance purposes. It might be technically legal but it's a legal loophole that needs to be slammed shut, and if Uber*'s fingers get caught in the door, tough luck.
*substitute Starbucks, Chevron, Amazon etc as required
@MrDamage
For all the pixels I have taken up blathering on about GST and dry regulations, I think you may have summed-up my exact position far more succinctly than I ever could.
I am 100% with you in that I have no problem with Uber as a service and I think there is a definite need for more taxi services and a richer variety of ways for people to engage these services.
Personally, I don't use Uber and never have. Part of that is because I don't have a smart phone so it's a non-starter for me, but I also do not want to support people who are, in my view flounting the laws and regulations and so competing unfairly and operating at a higher risk.
This is the same reason I don't use unlicensed tradespeople and if I needed to use a freight transport service, I wouldn't select one that offered a cheaper price by breaking weight-limits on their vehicles.
The argument, they they are not a taxi company, they are a technology company is complete tosh. They are a taxi dispatcher that happens to use computers to dispatch the cars.
I guess Amazon isn't a retailer, because, you know, they use computers to sell things... But there again, so do most shops these days, as do many taxi companies.
Here in Germany, they are acting illegally, or at least encouraging their drivers to do so. In Germany you need insurance to drive a car. If you are using it commercially (private hire), you need a professional driving licence, if you don't have that, you can't get insurance for driving commercially - just your private insurance, which covers driving to your permanent place of work, plus private driving.
But most Uber drivers don't have the relevant driving licence (which is very different to a taxi medallion in the USA, this is purely the type of driving licence), which means they are driving on private insureance, which in turn means:
1) if they have an accident, the insurance won't pay, so they will be personally liable for all damages
2) if they have an accident, they will be prosecuted for driving without insurance
3) if they are stopped by the police, they will receive a fine and possibly lose their licence
But Uber claims this isn't their problem, because they are a startup and they are shaking up the industry!
@big_D
While I agree with your post, you're actually chasing after their red-herring.
It doesn't matter at all whether Uber is a 'taxi company' or a 'technology company', nor whether they dispatch taxis or or not, nor whether they use computers and 'apps' or radios and meters.
That's because it's not really about Uber Australia the company or Uber in the Netherlands or how they are shunting funds back and forward. In some respects they could operate entirely from overseas as there is no need to provide any services to drivers or customers locally.
What it's really about is the Uber drivers.
THEY are the ones actually providing the service to the consumer and, as that service is taxable under the GST, they are the ones who are required - by law - to collect that 10% and then remit it to the ATO.
That is the heart of the issue here and most everything else it just distraction. The reason is that GST is a consumption tax borne by the consumer and so is levied on the cost of the sale to the consumer. It has nothing to do with the revenue or anything else: if a taxable sale is made for $55 then $5 of that is GST that is paid by the consumer for the sole purpose of it going to the Government. That $5 is not there for the Uber driver to keep.
So what Uber as a company actually is and whatever semantic somersaults they pull are absolutely irrelevant to GST. GST is a tax on the consumer at the point of purchase so all that matters is the service that the consumer is paying to be supplied with.
Uber passengers are paying for a service offered and used and consumed in Australia and that service is provided by an entity (the driver) in Australia who is engaged in activities done "in the form of a business".
The back-end technicalities of what is involved, end-to-end, in providing that service has no bearing on that because the service being paid for by the consumer - the passenger - is to be driven from one location to another location by someone in a vehicle provided for public hire for a fee and.
Why does Uber care if their drivers have to register for the GST?
First, it identifies them and so makes it far easier to deal with driver if it is ruled that they are breaking state taxi regulations. Second, and this is perhaps the bigger one, it means that Uber will have to pay their drivers more, which means either taking a smaller cut for themselves or raising the fares, which will remove some of their competitive edge.
In essence, Uber drivers (in Australia) have been supplementing their earnings by pocketing the GST that should, by law, be remitted to the government. Thus they are able to accept a lower base payment. Remitting that GST collected to the ATO means that they must re-evaluate their earnings and may find that driver an Uber car is no longer feasible unless prices are raised.
@nijam but Uber are using these drivers, without checking the drivers are legally allowed to transport passengers. That is their problem, because they are putting their reputation and the lives and welfare of their customers at risk.
If you are injured in a crash and the Uber driver is not insured, he files bankruptcy and you can pay for your own medical expenses and compensate yourself for loss of income... It isn't Uber's problem, according to you.
> Play by the law of the land, or get the fuck out.
The whole point of this (Australian) Senate hearing is to debate whether or not they are "playing by the law of the land". Until there's been a decision in court, they're innocent, no matter how much grandstanding politicos (or tabloid rants) say otherwise.
"... about not owing federal taxes because he, technically, had no income ..."
You'll note that they only got him on tax fraud because: He was committing tax fraud as far as the law was concerned of the day, and more so, because they had NOTHING else on him that would stick. Apparently, crime DOES pay, who would have thunk?
However, the likes of Uber and Amazon don't have that issue, because there's no tax fraud going on.
If you don't like how the law works, change it. Whining about it on a forum doesn't fix a damn thing.
> they only got him on tax fraud because: He was committing tax fraud
Really? The feds got Capone on tax fraud because Capone was committing tax fraud? Awesome conclusion, mate! Any other mind-blowing insights you'd like to share with us today?
> However, the likes of Uber and Amazon don't have that issue, because there's no tax fraud going on.
Really, again? Who sez there is no tax fraud going on? You? Aaah, yes. You're that Internet Guy who discovered that Al Capone was convicted of tax fraud because he committed tax fraud.
Yeah.
Crime didn't particularly pay off in his case. If he'd spent some of his ill-gotten on treatment he might not have died so early of syphilis.
Not that this can be seen as some sort of angry-sky-entity retribution for immoral works.
Don't you just love it when a company tries to tell the government how the law should work ?
In any case, I'm almost into encouraging Uber to go on with such shenanigans. Keep it up and you'll be the landmark case to describe why the creation of an Internet Tax Board was necessary.
And honestly, I think we'll get there. With the Internet, you can sell anywhere. Well anywhere's government is going to want their share of tax, because that sale happened in their country. It is useless to try and say that you base your revenue in another country when the issue is VAT or suchlike.
Foreign goods arrive in port and are subject to local VAT rates. Heck, even inside the USA sales are subject to each State's sales tax.
Uber is going to bite the bullet on this big time, because there is no government on this planet that is going to think they are exempt from sales tax. Not gonna happen.
> Don't you just love it when a company tries to tell the government how the law should work ?
Do pay attention. Every large company has tax experts and lawyers, and probably does know more about how tax law works than politicians do, and will certainly argue the point with the tax office whenever it can. (Note I say "how tax law works", not "how tax law should work", because *opinions about how it should work are irrelevant*.)
> Do pay attention. Every large company has tax experts and lawyers, and probably does know more about how tax law works than politicians do, and will certainly argue the point with the tax office whenever it can.
In my experience many large companies employ former employees from the tax office because of the knowledge they have gained as a tax collector. Note that the employees are employeed for their knowledge not as a reward.
Not all countries impose VAT on transport. While not a taxi driver, I am pretty certain there is no VAT on taxis, bus tickets, airline tickets and so on in Denmark (where I happen to live).
Taxis are hideously expensive in the socialist utopia Bernie Sanders so loves, about USD 8 flag fall when booked and some hideous km rate and time rate on top. On the other hand the taxi will be a late model Mercedes or similar, so you get a comfortable ride
I know this will go down like a lead balloon but I'd be inclined to just scrap corporation tax altogether. It's far to easy for a company to not pay any even if they aren't doing things against the spirit of the tax. The only benefit I see to corporation tax is that it slightly incentivises some companies to invest in R&D to reduce their profit but that's certainly not the case with most of the companies in the news.
I don't know what the solution is. Perhaps raise VAT as that catches the money generated inside the country but it also disproportionately hurts the poor.
given that a lot of necessities are zero-rated or exempt.
Ah yes. Apparently, in the UK, Jaffa cakes are a necessity, and are thus zero-rated. According to some IMHO lunatic quirk in the system, tampons and other sanitary items are not (maybe because they have wings?) and UK politicians seem suddenly and strangely too keen to follow EU diktats to fix that locally. Go figure.
A Biscuit or a Cake, that is the question - not to be confused with Egytian Themed Goons from a Stargate
I still think it actually takes the biscuit they can't address that right now. I would have done it anyway, damn the EU, and use any resulting court cases to make it so politically painful for the EU that they'd go along but hey, that would take political courage.
Anyway, apparently there is a review in Q1 2016, and I hope sanit(ar)y will prevail.
I think my favourite part is this:
“We don’t think that it is appropriate that the tax office has essentially applied a 1999 law to what is a brand new business model that didn’t envisage this type of activity”, public policy director Brad Kitschke told the inquiry.
Brilliant.
The Uber line in London, which has quite strict taxi regulations is that an Uber car cannot be considered a 'taxi' because taxis have 'taximeters' and, under the wording of the regulations, mobile-based apps are not considered to be 'taximeters'.
In other words, they are saying that, in London, an older law that "didn’t envisage this type of activity" is what should be used but, here in Australia, a law that didn't anticipate this service is unfair.
Of course, they could argue that their statements and position in the UK should have no relevance or bearing on their statements and position in Australia, but they have kind of precluded that argument having any real weight by their insistence (however correct or incorrect) that Uber is a non-national platform.
Actually, the real business model of Uber & C. is trying to move along rules gray lines, using smoke and mirrors to cover it, and trying to take full advantage of legalese and loopholes. For example, Uber is not very different from "fake" worker cooperatives used to bypass employee rules (very common, for example, in Italy, in the logistic sector).
The only difference is the use of some technology (far from being "disruptive" by itself) to achieve their aims. But for the matter, even multilevel marketing and pyramidal schemes moved to the tech area lately, and instead of "selling" physical goods they moved to "sell" services like ads or VoIP.
I make most of my money selling my games in the US. But I pay zero corporation tax there. Cos it's a UK Ltd company.
The big problem here isn't companies not paying their "fair share" of tax, it's commentards not understanding how tax law works and getting all whiney.
Please re-hire Tim Worstall.
We all know its legal. Instead of asking the same questions and getting the same answers over and over and instead of upping the gst to 15% how about changing the law to close the loop holes? For something sold in australia, australian tax is oweing or the business cant operate in this country? The gov would then be able to collect heaps more tax, fairly and legally from big business who most agree should be paying their share. The law would have to be carefully considered and written but it can be done.
Under current rules Australia income = $0
Change the rules:
1. Keep taxes etc. on transactions enacted in Australia the same
2. Set a stupid low rate on transactions enacted outside Australia by an Australian registered company.
Companies will now register in Australia to avoid every one else's less attractive tax laws.
With these rules, you'll now get the Australian sourced income you weren't getting before, and a little bit of every other countries income. Any other country that doesn't like it can enact the same regime, and we now have global competition driving down tax rates.
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