Federal Communications Minister Stephen Conroy has warned technology giants that the Federal Government will be coming after them, saying at the CeBIT conference in Sydney it has plans to start taxing Google and other international companies at a much higher rate.
The issue of tax paid by international tech giants has been in the spotlight recently after it was revealed Google Australia only paid $74,000 in tax on more than $900 million in advertising revenue.
Apple is also estimated to have paid a relatively low amount of tax, about $91 million on local revenue of about $4.8 billion.
Conroy also took the opportunity to attack opposition communications spokesman Malcolm Turnbull, who called for a similar tax earlier this week on his website, but then said later he was not proposing any change in Coalition policy.
“This is a problem that goes across all sectors, so we’re bringing across legislation because we think we’ve got to ensure Australians get a fair share,” Conroy said, according to the Australian Financial Review.
“[It’s] just like with the mining tax where we want to make sure Australians get a fair share of the wealth that Australians own. It’s not owned by these companies; Gina Rinehart does not own these minerals and neither does Twiggy Forrest or Clive Palmer.”
It is understood Treasury will be consulting on the changed tax laws, with drafts due soon. The laws will not specifically target tech companies, but rather situations where companies set prices based on how they can shift taxes to countries with lower rates. The government has been under pressure to make movement in this area for some time.
Both Conroy’s office and Apple were contacted by SmartCompany this morning but neither was available to comment before publication.
Google was also contacted, but declined to comment.
The issue is not Australia-specific. Some countries in Europe, including Britain, are under pressure to tax both Apple and Google more as the companies shift profits through different countries. Amazon has also been named as another suspected culprit, with critics saying it has paid no tax in the past three years.
Malcolm Turnbull was reported as saying multinational companies should pay more tax, telling the AFR that over time, “the erosion of the tax base will become material”.
But in a blog post made earlier this week, he backed away from these comments: “I am not proposing any specific change to the existing tax laws or flagging a shift in Coalition policy”.
Conroy seized on the opportunity yesterday, saying it was the “backflip of the century”.
“If Malcolm Turnbull wants to support it and put taxpayers first, then we look forward to the opposition’s support,” he said.
“But that’s a record backflip. He went for a quick and easy grab and within an hour or two he was blogging he didn’t really mean it.”