The Federal Treasurer Joe Hockey has announced that Australia will assist global efforts to combat cross-border tax avoidance and evasion by requiring Australian financial institutions to report on foreigners holding assets in Australia.
The information will be provided to the Australian Taxation Office (ATO) who will then share it with other tax authorities around the world.
Tax authorities will provide the ATO with information about Australians who have assets and income overseas. So far more than 60 countries will participate in the scheme.
The Australian government will join the scheme in 2017, despite some Australian businesses lobbying to delay implementation of the arrangement until 2018.
The ‘automatic exchange of information’ between tax authorities has been one of the main asks of the Tax Justice Network globally, of which the synod is a member and acts as the secretariat for the Tax Justice Network Australia.
Automatic exchange of information makes it harder for tax cheats to hide their assets and income from tax authorities and acts as a significant deterrent to tax avoidance and evasion.
“It has been great that Uniting Church members have written letters to the federal government urging them to fully participate in automatic exchange of information between tax authorities,” Dr Mark Zirnsak of the Justice and International Mission (JIM)* unit said.
“Surveys conducted by the Tax Justice Network Australia show overwhelming community support for meaningful government action to crack down on tax cheats.”
Developing countries are particularly harmed by tax avoidance and evasion activities. Estimates suggest lost revenue to these countries far out-strip the total funding they receive in aid.
The ATO reported in its 2012-2013 annual report that even the existing exchange of information cases with other governments contributed to around $480 million of adjusted tax, penalties and interest.
*JIM is a unit of the Commission for Mission