Miners dominate company tax list as others pay zero

Despite the record level of receipts, underpinned by a $43 billion contribution from the mining sector, almost a third of businesses avoided a tax bill.

Data showed that 1253 entities from a total of 3985 businesses did not pay tax, although this was a reduction of five per cent since the first transparency report in 2013/14.

Of the 31 per cent that did not pay tax, 14 per cent incurred an accounting loss, seven per cent incurred a tax loss, two per cent utilised offsets and eight per cent used tax losses from the prior year.

Deputy Commissioner Rebecca Saint said the ATO paid close attention to those who pay no income tax. (Mick Tsikas/AAP PHOTOS)

ATO Deputy Commissioner Rebecca Saint said there were "legitimate reasons" why a company might pay no income tax.

"The Australian community can be assured we pay close attention to those who pay no income tax to ensure that they are not trying to game the system,' she said.

She hailed the total income tax figure of $97.9 billion as a "great result" and said tax paid in 2022/23 was the highest since corporate tax transparency reporting started.

Most sectors of the economy paid more tax than the previous year and the oil and gas sector contributed $11.6 billion, driven by a combination of commodity prices, the project production life cycle and ATO intervention.

We collected $100 billion from large corporates. More info @ — ato.gov.au (@ato_gov_au) https://t.co/1rGTnVhrN3October 31, 2024

The Minerals Council of Australia noted that the mining sector paid $43.1 billion in company tax and $31.5 billion in royalties, highlighting the role mining plays in the economy.

"This means reliable funding for the NDIS, schools, roads, aged care, hospitals, and Australia's national security, including the AUKUS submarine program," said chief executive Tania Constable.

For the second year in a row, the "mining, energy and water" segment paid more tax than all other sectors combined, contributing 55.9 per cent ($54.7 billion) of the total, an increase of $12.5 billion on the previous year.

Mining companies make up more than half of the nation's top 20 largest taxpayers, with Rio Tinto, BHP, and Glencore taking the top three spots. 

Woodside was the fifth-largest taxpayer in the country, paying more than $4 billion in combined income tax and petroleum resource rent tax.

Woodside chief executive Meg O'Neill said the company was "enormously proud" to be a robust contributor to Australia's wealth and prosperity.

It comes after Wesfarmers chair Michael Chaney said companies like his were essential to the nation's economic prosperity amid cost-of-living pressures, adding "almost all the profits ended up outside the company".

"For some external parties, profit seems to be a dirty word, but it is important to understand how profitable businesses are essential to our economy and future prosperity," Mr Chaney told the Wesfarmers annual meeting on Thursday.

The federal government said the tax data was evidence of its efforts to bolster ATO compliance operations, including $200 million in increased funding for the Tax Avoidance Taskforce.

Stephen Jones said government was chasing a yearly shortfall of more than $33 billion in unpaid tax. (Bianca De Marchi/AAP PHOTOS)

Financial Services Minister Stephen Jones said the increase in tax collected vindicated the work of the government and ATO to claw back money owed by some of Australia's biggest companies.

"The ATO's work is crucial in the fight to hold big companies to account. Our government will always ensure it has the resources necessary to retrieve what is owed so we can fund services the community needs," he said.

Mr Jones said the Tax Avoidance Taskforce had led a crackdown on tax dodging by multinational enterprises, large Australian public and private groups and wealthy individuals.

Since the taskforce was formed in 2016, it had helped secure more than $33.2 billion in additional tax revenue from multinational enterprises, large public and private businesses.