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The federal government will move to exempt around 700 private businesses from tax disclosure laws amid concerns business leaders could become kidnapping targets if members of the public found out how wealthy they are.
The tax disclosure laws, which were legislated by the former Labor government, are due to come into effect from the start of the next financial year on July 1. Under the laws, tax details of around 1600 private and public companies with more than $100 million turnover will be published on the data.gov.au website, including the entity’s Australian Business Number, total income, taxable income and tax paid.
But Fairfax reports Assistant Treasurer Josh Frydenberg has told his party room colleagues there are real concerns among some of the private companies expected to fall under the laws that executives could be the target of kidnap attempts.
Prime Minister Tony Abbott reportedly listened to Frydenberg’s case in a party room meeting on Tuesday and agreed to move forward with plans to exempt around 700 private businesses from the rules.
Frydenberg confirmed to SmartCompany the government is considering its response to the concerns of privately owned Australian companies.
“Legitimate concerns of both a personal and commercial nature have been raised about the misuse of information related to privately-held companies that is made public as part of tax transparency measures,” Frydenberg says.
“Consideration of whether information about private companies is published in no way diminishes their legal accountability to the ATO and its ability to enforce Australia’s tax laws.”
Business groups have long lobbied for the scrapping of the laws, which Labor argues will provide more transparency around the tax affairs of large multinational companies. There are concerns the disclosure of the details could be misleading or put the companies at a commercial disadvantage.
Even if the government’s exemption plans go ahead, the tax details of the country’s largest public companies are still expected to be published online.
In a consultation paper released on Friday, the Australian Tax Office said it expects the first lot of data to be published at the end of this year, with an annual report to be produced each subsequent year.
According to the legislation governing the rules, the objectives are to “discourage large corporate tax avoidance practices” and to “provide more information to inform public debate about tax policy, particularly in relation to the corporate tax system”.
However, the ATO said companies will be given an opportunity to “confirm the accuracy of their information before it is reported”.
The ATO is seeking submissions from members of the business community about the disclosure regime until April 10 and said one objective of the consultation process is to determine how the information can be presented to avoid any concerns the disclosures may give a misleading impression of a company’s financial state.
Peter Strong, executive director of the Council of Small Business of Australia, welcomed Frydenberg’s concerns for the safety of Australian business people, but told SmartCompany this morning he would like to see the “safety and welfare of small businesses was higher on the agenda as well”.
“Big businesses have a history of creating health problems for small businesses so it would be nice if the same level of care was extended to us,” Strong says.
But Strong says the government still has questions to answer about what it is going to do to ensure large corporations pay a fair share of tax.
“From a small business perspective, it’s not a good look,” he says.
“Small businesses can’t hide from the tax office but big businesses do hide and they are supported in that.”
*This article was updated on March 20 to include comments from Assistant Treasurer Josh Frydenberg.