Over the last 5 years, the increase in the number of entities in each industry in the corporate transparency population has been a key contributing factor to growth in income and tax paid across all segments. The exception is Australia’s Mining, Energy and Water segment, where commodity prices and export volumes have been key contributing factors in income and tax paid.
Over the 5-year period, Banking, Finance and Investment and the Insurance segments experienced small declines in tax paid. The Manufacturing, Construction and Agriculture, and Wholesale, Retail Services segments have experienced small increases in tax paid.
The following figures illustrate the changes by industry segment in tax payable, total income, taxable income, and entity counts.
Tax payable
Figure 9 shows the trend in tax payable by industry segment over the past 5 years. Table 1 summarises this data.
Figure 9: Tax payable by industry segment over 5 years
Table 1: Five-year trend of tax payable by industry segment ($b)
Industry segment |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
|---|---|---|---|---|---|
Banking, Finance and Investment |
15.5 |
16.2 |
14.9 |
14.1 |
15.2 |
Insurance |
2.7 |
2.7 |
2.2 |
1.9 |
1.8 |
Manufacturing, Construction and Agriculture |
3.5 |
4.1 |
3.7 |
3.7 |
4.1 |
Wholesale, Retail and Services |
11.9 |
13.2 |
12.4 |
12.5 |
15.3 |
Mining, Energy and Water |
12.1 |
16.1 |
22.9 |
25.0 |
32.3 |
All industry segments |
45.7 |
52.3 |
56.1 |
57.2 |
68.6 |
Total income
Table 2 shows the total income by industry segment over the past 5 years. Total income was $2,292.5 billion in 2020–21, an increase of 4.9% on the prior year.
Banking, Finance and Investment, Insurance, and Manufacturing, Construction and Agriculture have all seen a small growth in total income over the last 5 years, while the other sectors have experienced stronger growth.
Income tax is applied to taxable income not total income. Total income generally includes all income received. Taxable income is the portion of total income that's actually subject to taxation. Deductions are subtracted from gross income to arrive at taxable income. Deductions can vary from industry to industry for example retail could have a high percentage of deductions reflecting smaller gross profit margins. When commodity prices are high, mining companies can have a lower percentage of deductions relative to total income.
Table 2: Five-year trend of total income by industry segment ($b)
Industry segment |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
|---|---|---|---|---|---|
Banking, Finance and Investment |
270.0 |
292.1 |
285.2 |
283.8 |
309.8 |
Insurance |
116.2 |
122.3 |
132.7 |
130.9 |
190.9 |
Manufacturing, Construction and Agriculture |
300.8 |
332.4 |
335.5 |
345.4 |
341.1 |
Wholesale, Retail and Services |
824.3 |
882.2 |
932.9 |
956.1 |
975.8 |
Mining, Energy and Water |
336.8 |
371.1 |
442.4 |
468.3 |
475.0 |
All industry segments |
1,848.1 |
2,000.0 |
2,128.7 |
2,184.5 |
2,292.5 |
Taxable income
Taxable income is a company’s total income minus expenses. The amount of taxable income is affected by revenue growth and market conditions. For example, interest rate changes will affect a company’s borrowing expenses.
Insurance, and Manufacturing, Construction and Agriculture have both experienced a decline and low growth in taxable income as those sectors faced challenging economic conditions.
The Mining, Energy and Water segment is a major contributor to the overall increase in taxable income, with steady and consistent growth over the past 5 years.
The Banking, Finance and Investment segment had a rise in taxable income in 2020–21 as financial investments rebounded from the initial shock of COVID-19 in the prior financial year.
The taxable income of the Wholesale, Retail and Services segment increased as the aggregate level consumption of these services increased.
Table 3 shows taxable income by industry segment over the past 5 years. Taxable income was $256.6 billion in 2020–21, an increase of $48.0 billion (23.1%) on the prior year. All non-mining sectors, except the Insurance segment, have seen increases in taxable income this year.
Table 3: Five-year trend of taxable income by industry segment ($b)
Industry segment |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
|---|---|---|---|---|---|
Banking, Finance and Investment |
63.3 |
74.9 |
63.9 |
60.2 |
81.8 |
Insurance |
14.5 |
14.4 |
12.7 |
10.1 |
5.3 |
Manufacturing, Construction and Agriculture |
12.7 |
14.8 |
15.4 |
13.2 |
15.2 |
Wholesale, Retail and Services |
35.2 |
40.1 |
37.1 |
34.8 |
42.7 |
Mining, Energy and Water |
30.4 |
49.3 |
79.1 |
90.0 |
111.5 |
All industry segments |
156.2 |
193.5 |
208.2 |
208.4 |
256.6 |
Count of entities
Over the 5 years increases in the number of entities in each industry has been a contributing factor to income and tax paid across all segments. The exception is the Mining, Energy and Water segment, where commodity prices and export volumes have been additional key contributing factors to growth in this sector.
Table 4 shows the number of entities by industry segment over the past 5 years.
Table 4: Number of entities by industry segment
Industry segment |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
2020–21 |
|---|---|---|---|---|---|
Banking, Finance and Investment |
205 |
217 |
222 |
240 |
271 |
Insurance |
62 |
62 |
67 |
69 |
71 |
Manufacturing, Construction and Agriculture |
485 |
501 |
527 |
538 |
544 |
Wholesale, Retail and Services |
1,125 |
1,192 |
1,239 |
1,265 |
1,320 |
Mining, Energy and Water |
232 |
242 |
256 |
258 |
262 |
All industry segments |
2,109 |
2,214 |
2,311 |
2,370 |
2,468 |