The government envisions a tax system that enhances productivity, lifts growth, encourages participation and provides reward for effort. To achieve this, we are working with the community to ensure a fair and sustainable tax base for Australians today and in the future.
While Australia is widely recognised as having one of the most robust tax systems in the world, we will always face challenges and look for opportunities to improve.
Indeed, emerging threats around corporate tax are currently at the fore of international tax dialogue.
Rapid changes in technology and increasing electronic transactions across world markets have changed the environment in which multinational companies operate. Transactions which once took place in person, in a physical location, now take place somewhere in cyberspace.
With the complex economic environment we need to ensure that our tax architecture keeps up with these advances.
Australians have expressed concern in response to media reports of questionably low tax contributions from certain multinational companies. After all, companies operating in Australia enjoy the benefits of conducting business on our shores and having access to the services and infrastructure that are funded or supported by Australian taxpayers.
When multinationals don't pay their fair share, they gain an unfair competitive advantage over domestic companies and disadvantage Australian taxpayers who must make up the tax shortfall or accept a reduction in government services due to reduced revenue.
The tax-planning behaviour of multinationals has highlighted the importance of bringing our laws up to date with the changing economic environment to close the gap that enables companies to avoid paying their fair share.
We have responded to the need to protect our corporate tax base by making reforms to our tax laws. Last year, amendments to current transfer pricing laws received royal assent and we are currently focused on across-the-board modernisation of Australia's transfer pricing regime to align with international best practice. We are also making changes to strengthen the general anti-avoidance rule to ensure the law is applied as intended.
International dialogue plays a critical role in these reforms and in re-thinking key aspects of the international tax architecture. Australia is internationally recognised as a key player in multilateral efforts to improve international cooperation on tax issues and we are committed to continuing to develop strong levels of cooperation with our international partners.
These are all serious challenges that jurisdictions around the world must tackle and the government is committed to confronting these issues so that the Australian tax system continues to be fair and sustainable into the future.
The Hon David Bradbury
Minister Assisting for Deregulation