Why PM could win big with Google tax
A TAX crackdown on digital giants like Amazon and Google could be the key to Malcolm Turnbull securing enough crossbench support to pass his massive $35.6 billion tax cut for big business.
Centre Alliance senators Rex Patrick and Stirling Griff have indicated they could support the Prime Minister's corporate tax rate cuts if a proposed tax on digital giants rakes in enough revenue to put the budget back into a safer position to afford them.
Their support, if granted, would secure the Coalition the two more votes it needs to pass the company tax cuts.
Treasurer Scott Morrison flagged a crackdown on tech giants making massive profits in the digital economy in the 2018 budget two weeks ago.
A discussion paper on the new tax measures will be released within weeks, which should clarify how much tax revenue Australian could claw back from the digital economy.
The Centre Alliance senators, who met with Finance Minister Mathias Cormann in Adelaide last week, have indicated budget repair measures, like the digital economy tax, are key to securing their support for the government's plan to cut the corporate tax rate from 30 per cent to 25 per cent by 2026-27.
Senator Patrick told The Australian the party has had a keen interest in seeing multinational corporations such as Facebook and Amazon pay their fair share of tax since it was led by Nick Xenophon.
"We would like to see fair taxes paid by those companies, and at this point in time we don't think it's fair," Senator Patrick told the publication.
"Our primary concern is making sure that moving forward you wouldn't have any cuts to health, education and welfare, and, as a result, any revenue measure that broadens the tax base and makes sure everyone is paying their fair share is a good thing."
Senator Patrick said he believed the government was about to unveil tax measures "that might help everyone".
Meanwhile, Senator Griff told The Australian he was "very keen to see the specifics" of the Google tax, saying it was clear tech giants were not paying their fair share in Australia.
"If there are new or improved revenue sources so we feel comfortable there is sufficient money coming into the coffers, and at the same time there is a cast-iron guarantee that if things go pear-shaped there wouldn't be a cut to core community services, then of course we'd be open to negotiation," he said.
Senator Griff said he expected the government would seek to follow the EU, which has announced a plan for big tech companies to pay a 3 per cent tax on the money they make from user data or digital advertising in the jurisdiction where the revenue is raised.
Currently, companies are taxed where they make their profits, which has allowed corporations to shift their profits to low-tax jurisdictions.
Read more at The Australian