Assistant Minister for Competition Andrew Leigh feels small businesses are unfairly disadvantaged because they pay their taxes while some multinationals don’t.
And because corporate tax accounts for 19% of the nation’s income, the federal government wants to introduce international tax reforms to ensure multinationals pay their fair share.
Countries have continued to drop their corporate tax rates to attract investment from multinationals. This has caused global corporate tax rates to drop from an average of 49% in 1985 to 24% in 2019, according to Leigh.
But some multinationals are paying far less tax because they use trademarks, royalties and inter-group transactions to move their profits to tax-haven countries.
To counter this, Australia is one of 130 countries that supports a global minimum corporate tax rate of 15%.
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