The Abbott government is pressing ahead with plans to exempt about 1,000 Australian-owned private companies from tax transparency measures after claims wealthy owners could face kidnapping threats.
After the kidnapping suggestion was raised at a Coalition party meeting in March, the government confirmed it was looking to amend the disclosure rules in part due to concerns about risks to personal safety.
On Thursday the government released an exposure draft of legislation to wind back Labor-era laws that require the publication of basic tax information of corporate entities with at least $100m in annual turnover.
Labor vowed on Friday to oppose the changes, saying the exposure draft was evidence the government was determined “to shield some of Australia’s biggest firms from reasonable disclosure about whether they’re paying their fair share”.
The proposed change would exempt private companies – such as those controlled by the billionaire mining magnate Gina Rinehart – from disclosures that were due to be published by the Australian Tax Office the first time later this year.
But the ATO would still be required to publish details about companies listed on the stock exchange and multinational corporations operating in Australia.
The proposed exemption would spare about 1,000 of the 2,300 companies that were to be subject to the disclosure obligations, according to the latest government estimates. Previously published estimates suggested the exemption would benefit about 700 out of 1,600 affected companies.
The former Labor government’s tax transparency laws required the publication of the total income, the taxable income or net income, and income tax payable of corporate tax entities with $100m or more in total income.
Explanatory notes accompanying the Coalition’s draft bill say the proposed changes are designed to ensure the public release of information “does not affect the privacy and personal security of the ultimate owners of Australian-owned private companies” and does not harm “market environments”.
“The government has a number of concerns with the [existing] laws,” the notes say. “Privacy concerns exist for the Australian owners of closely held companies where the disclosure of the companies’ information effectively discloses information about the owners’ financial affairs.
“Many private companies have raised legitimate concerns about the commercial sensitivity of the information and the impact of disclosure on their personal privacy and security. The nature of the information disclosed can be misleading in that it ignores the residual liability on the owners for personal income tax payable on the company’s distributed after tax profits.