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Income tax payable

Last updated 2 November 2022

Over one million entities lodge company income tax returns in Australia. At the time of publication, the 2,468 entities in the corporate transparency report represent approximately 65% of total corporate income tax payable in 2020–21. This population contributed $68.6 billion in tax payable. This represents a net increase in tax payable from 2019-20 of approximately $11.4 billion (19.8%).

The increase in tax payable was primarily driven by the Mining, Energy and Water segment (in particular, strong iron ore prices and high export volumes). Wholesale, Retail and Services also showed strong growth in tax payable. Segments relating to Banking, Finance and Investment, and Manufacturing, Construction and Agriculture were relatively stable during the period. There was a decline in tax payable in the Insurance segment. These numbers reflect the differentiated impact of COVID-19 during 2020–21.

Tax payable – by ownership segment

Australian public entities contributed the most tax paid at 66.2%. This is followed by foreign-owned entities at 22.9% and Australian private entities at 10.9%.

Australian public entities contributed the most to the growth in tax payable in 2020–21 with $9.5 billion. Foreign entities contributed $1.7 billion in growth, while Australian private entities had smaller growth at $140 million. This data is presented in Figure 7.

Figure 7: Change in tax payable by ownership segment

Total tax payable by corporate entities in 2020–21 was $68,604 million, compared with $57,245 million in 2019–20. Tax payable increased in 2020–21 by $140 million for Australian private entities, $1,740 million for foreign-owned entities and $9,480 million for Australian public entities.

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 a growth of $7.3 billion (see Figure 8). This is driven by strong commodity prices and high export volumes. The Wholesale, Retail and Services, and Banking, Finance and Investment segments also showed growth contributing $2.8 billion and $1.1 billion respectively. There was a decline in tax payable in the Insurance segment of $118 million. There was low growth in Manufacturing, Construction and Agriculture reflecting more challenging economic conditions impacting that segment in 2020–21, and a softening in non-mining sector corporate profits in recent years.

Figure 8: Change in tax payable, by industry segment

Total tax payable by corporate entities in 2020–21 was $68,604 million, compared with $57,245 million in 2019–20. Tax payable decreased in 2020–21 in the insurance segment by -$118 million. Manufacturing, construction and agriculture segment had increased tax payable during 2020–21 of $323 million, banking, finance and investment increased by $1,102 million, wholesale, retail and services increased by $2,820 million, and mining, energy and water had increased tax payable of $7,233 million.

Economic and environmental factors can affect the performance of an industry segment each year. For example, the Insurance segment was affected by several natural disasters in 2020–21. Recurring factors can affect any business but especially the tax performance of the Mining, Energy and Water segment.

Read more about the reasons why some corporations pay no tax.

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