Trends in income and tax paid
Over the 5-year period, the tax payable for all industries has increased. Tables 1 to 4 summarise the 5-year trends for tax payable, total income, taxable income, and entity counts respectively.
Tax payable
Four industry segments had an increase in tax payable over the past 5 years.
Figure 9: Tax payable by industry segment over 5 years
Table 1 shows the tax payable by industry segment over the past 5 years. The mining sector's contribution to total tax paid by the tax transparency population has increased during this time. In 2019–20, the Mining, Energy and Water segment contributed 43% of tax paid, rising steadily to 51% in 2023–24. This highlights the significance of this sector to the overall corporate tax payable.
Table 1: 5-year trend of tax payable by industry segment ($ billion)
|
Industry segment |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|
|
Banking, Finance and Investment |
14.7 |
15.5 |
16.0 |
15.9 |
16.4 |
|
Insurance |
1.6 |
1.8 |
2.4 |
1.9 |
2.3 |
|
Manufacturing, Construction and Agriculture |
4.1 |
4.0 |
6.0 |
5.7 |
7.5 |
|
Wholesale, Retail and Services |
12.4 |
15.1 |
17.4 |
19.6 |
21.0 |
|
Mining, Energy and Water |
24.4 |
32.1 |
42.2 |
54.7 |
48.5 |
|
All industry segments |
57.2 |
68.6 |
84.0 |
97.9 |
95.7 |
Total income
Table 2 shows the total income by industry segment over the past 5 years. Total income was $3,278.8 billion in 2023–24, an increase of 4.5% on the previous year.
All segments have reported strong growth in total income over the last 5 years, with the largest (by percentage) being the Banking, Finance and Investment segment. The Insurance segment experienced smaller growth compared to the other segments.
Table 2: 5-year trend of total income by industry segment ($ billion)
|
Industry segment |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|
|
Banking, Finance and Investment |
310.6 |
392.3 |
319.2 |
436.1 |
517.3 |
|
Insurance |
119.3 |
124.4 |
134.8 |
143.4 |
158.6 |
|
Manufacturing, Construction and Agriculture |
343.6 |
336.7 |
377.0 |
466.1 |
505.3 |
|
Wholesale, Retail and Services |
947.4 |
966.7 |
1,103.6 |
1,358.3 |
1,418.4 |
|
Mining, Energy and Water |
463.5 |
472.7 |
610.5 |
734.6 |
679.1 |
|
All industry segments |
2,184.5 |
2,292.5 |
2,545.0 |
3,138.4 |
3,278.8 |
Income tax is applied to taxable income not total income. Total income generally includes all income received. Taxable income is the portion of total income that is subject to taxation.
Taxable income is calculated by subtracting allowable deductions from total income. Deductions can vary from industry to industry, for example mining companies can have a lower percentage of deductions relative to total income when commodity prices are high.
Taxable income
Taxable income is a company’s total income minus deductible expenses and adjusted for the differences between accounting and tax standards. Prior year losses may also be applied to further reduce taxable income.
Table 3 shows taxable income by industry segment over the past 5 years. Taxable income was $365.5 billion in 2023–24, a decrease of $14.5 billion (3.8%) compared to the previous year.
The Wholesale, Retail and Services segment contributed the largest percentage increase in taxable income, with very strong growth over the past 5 years. This is due to high levels of household spending, strong consumer demand and increasing prices.
In contrast, the Insurance segment experienced a decrease in taxable income, as it was faced with challenging economic conditions and multiple natural disasters.
The decline in taxable income (−$2 billion) for the Insurance segment in 2023–24 was mostly due to the application of AASB 17 Insurance contractsExternal Link (AASB 17), the new accounting standard for life, general and health insurance contracts. For life insurers, the transition from AASB 1038 to AASB 17 resulted in a restatement of accounts for accounting purposes (i.e. adjustments). As an expected consequence of AASB 17, the life insurance sector reported significantly larger tax losses. These losses will be recouped in future years through increased revenue over the life of the insurance contracts. Despite the significant increase in tax losses for this segment, tax payable increased in 2023–24.
Table 3: 5-year trend of taxable income by industry segment ($ billion)
|
Industry segment |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|
|
Banking, Finance and Investment |
67.0 |
83.9 |
92.3 |
87.1 |
84.2 |
|
Insurance |
4.2 |
4.6 |
9.0 |
7.1 |
−2.0 |
|
Manufacturing, Construction and Agriculture |
15.4 |
15.5 |
21.9 |
20.4 |
30.5 |
|
Wholesale, Retail and Services |
34.7 |
41.8 |
54.9 |
65.3 |
73.1 |
|
Mining, Energy and Water |
87.2 |
110.8 |
163.3 |
200.2 |
179.8 |
|
All industry segments |
208.4 |
256.5 |
341.4 |
380.1 |
365.5 |
Count of entities
Over the 5 years, increases in the number of entities in each industry has contributed to the growth in taxable income and tax payable.
Table 4: Number of entities by industry segment over 5 years
|
Industry segment |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
2023–24 |
|---|---|---|---|---|---|
|
Banking, Finance and Investment |
261 |
290 |
315 |
421 |
444 |
|
Insurance |
67 |
70 |
73 |
80 |
84 |
|
Manufacturing, Construction and Agriculture |
527 |
539 |
611 |
977 |
1,006 |
|
Wholesale, Retail and Services |
1,258 |
1,308 |
1,440 |
2,166 |
2,233 |
|
Mining, Energy and Water |
257 |
261 |
274 |
341 |
343 |
|
All industry segments |
2,370 |
2,468 |
2,713 |
3,985 |
4,110 |