Big companies dodge tax – why can’t we?

End of financial year is almost upon us, which means it’s almost time for the ATO to start issuing its annual warnings urging us not to scam the taxman.

“Don’t log deductions for work expenses that weren’t entirely for the purpose of work,” they warn. “And we are cracking down on those work kilometres you’re all claiming!”

This is all well and good – it’s the ATO’s job to make sure we don’t over-claim for deductions we’re not entitled to.


But I can’t help but wonder… what if they took just a fraction of the attention they pile onto everyday wage earners, and redirected it to the corporates who are fleecing them dry?

Pharmaceutical companies alone – the headquarters behind some of Australia’s most well-known brands, including Band Aid, Centrum and ChapStick – are getting away with avoiding paying tax to the tune of hundreds of millions per year, according to Oxfam.

Oxfam’s report, Prescription for Poverty, found that in Australia, the four largest global pharmaceutical companies are estimated to have unfairly avoided paying $215 million in taxes a year between 2013 and 2015.

Oxfam Australia Chief Executive Helen Szoke says that these actions, whilst not illegal, are not in line with the spirit of the law.

“Australians expect that the best known and trusted pharmaceutical brands would be doing the right thing when it comes to paying their fair share in tax, yet Oxfam’s research shows these four companies seem to be doing the exact opposite,” she says.

Across nine wealthy countries (including Australia), Oxfam found that these four companies, Johnson & Johnson, Pfizer, Merck & Co and Abbott, appear to have avoided $4.8 billion a year in tax revenues over the period.

“This report again highlights the broken global tax system… Shedding light on practices like these will help to hold companies to account, so that tax is paid where companies really make profit,” Szoke says.

Bottom line? These big businesses are leveraging unfair tax avoidance schemes to rake in massive profits.

It certainly makes me feel less guilty about the bordering-on-untrue uniform deductions I claimed last year…