Tax payable in 2022–23
Over one million entities lodge company income tax returns in Australia. At the time of publication, the 3,985 entities in the Corporate transparency report represent approximately 71% of total corporate income tax payable in 2022–23.
The increase in tax payable was primarily driven by the Mining, Energy and Water segment, in particular, strong increases in tax payable from oil, gas, thermal coal and lithium producers. Wholesale, Retail and Services also showed steady growth in tax payable. Other industry segments experienced small declines in tax payable.
Tax payable – by ownership segment
Australian public entities contributed the most tax paid at 47.9%. This is followed by:
- foreign-owned entities at 41.5%
- Australian private entities with income above $200 million at 8.1%
- Australian private entities with income between $100 million and $200 million at 2.5%.
Figure 7 shows changes in tax payable:
- Foreign-owned entities contributed the most to the growth in tax payable in 2022–23 with $16.9 billion
- Australian private entities with income between $100 million and $200 million contributed $2.5 billion
- Australian public entities had a decrease of $3.6 billion
- Australian private entities with income above $200 million had a $1.8 billion decrease.
Figure 7: Change in tax payable by ownership segment
Tax payable – by industry segment
The increase in tax payable across the corporate transparency population this year was primarily driven by the Mining, Energy and Water segment, with growth of $12.5 billion (see Figure 8). This was driven by strong growth in some commodity prices and our earlier interventions in the oil and gas sector, resulting in additional collections flowing through the system in 2022−23.
The Wholesale, Retail and Services segment reported steady growth of $2.1 billion and Banking, Finance and Investment a slight increase of $68 million. This is in contrast to the remaining industry segments which reported negative growth in 2022–23. The Manufacturing, Construction and Agriculture segment decreased $191 million. This was driven by increasing cost pressures impacting the cost-sensitive manufacturing and agriculture industries, offset partly by growth in the construction industry.
The Insurance segment had the largest decrease of $505 million, however tax paid in 2021–22 was well above the long-term average, indicating a return to the longer-term trend. Despite the drop in tax paid in 2022–23, it remained higher than the amount paid 2 years prior. The life insurance businesses reported the largest decline due to a combination of factors, including some experiencing a decline in business income.
Figure 8: Change in tax payable, by industry segment
Economic and environmental factors can affect the performance of an industry segment in any given year. For example, natural disasters may affect the General insurance industry.