Sam Dastyari slams Tax Office for withholding documents

Labor Senator Sam Dastyari has accused the Tax Commissioner of protecting some of the nation’s worst tax dodgers after the commissioner denied access to documents which could embarrass some of the world’s biggest mining companies.

On the eve of the corporate tax avoidance inquiry by a parliamentary committee led by Senator Dastyari, commissioner Chris Jordan rejected the committee’s request for unredacted copies of documents that name companies operating marketing hubs to minimise tax by profit-shifting.

The Australian Financial Review revealed on Tuesday that BHP Biliton and Rio Tinto were being purused by the ATO for channelling billions of dollars in profits through companies that pay almost no tax in Singapore.

In a letter to Senator Dastyari, Mr Jordan said based on legal advice, there was no precedent for giving a Senate committee access to the documents to be “discussed in public session”.

The decision sets up a confrontation with Mr Jordan and Senator Dastyari when Mr Jordan appears before the Senate Economics Reference Committee on Wednesday to answer questions.

“They have made a policy decision to not reveal this information and I believe they have made the wrong decision,” said Senator Dastyari, the chairman of the committee.

“It is disappointing that the ATO has decided to protect some of Australia’s worst tax minimisers.”

Public confidence

The Tax Office documents were obtained through Freedom of Information requests earlier this year by the Uniting Church, but heavily redacted.

After weekend media reports that Senator Dastyari’s committee was seeking unredacted copies of the documents, Mr Jordan said he had obtained legal advice and would make a public interest immunity claim.

It is not known if any of the companies named in the documents had contacted the Tax Office. Earlier, the committee had appeared confident it would receive the documents.

But Mr Jordan argued he could not hand them over.

“It is of the utmost concern to the integrity and effectiveness of taxation administration in Australia that the public has confidence that confidentiality will be maintained over their taxation and commercial information when it is provided to the ATO,” Mr Jordan wrote to Senator Dastyari.

“It is without precedent that this type of confidential taxpayer information would be received by a parliamentary committee and discussed in public session.”
Tax at risk

Mr Dastyari said it was clearly open to the Tax Office to release the documents. “They can if they want to. They’re just choosing not to,” he said.

“Let’s be clear – under parliamentary privilege there is no reason why this information cannot be shared, through this inquiry, with the Australian public.

“The more Australians learn about these issues – the more information they want. The ATO should be playing a stronger role in revealing that information.”

He said a central question the committee had to address was whether the marketing hub cases involving mining companies and technology companies were isolated pockets of aggressive tax policy or a widespread problem across the economy.

“We can’t answer that until we know this information,” he said. “If companies are prepared to engage in aggressive tax minimisation – they should be prepared to face up to it publicly.”

The redacted ATO material includes an 11-page document titled Offshore hubs mitigation strategy, of which almost seven pages are redacted in full.

The document, produced in 2013, says for the 15 marketing hub cases on foot at December 2012, the “tax at risk” was estimated at $680 million.

That figure is currently close to $1 billion, though this does not include interest and penalty charges which typically double the base risk total.

It is not clear whether this figure includes all of the cases before alternate dispute resolution and other reviews, but it is believed the redacted pages identify a number of the taxpayers and their advisers.