Crackdown on oil and gas giants delivers nation billions in extra tax

A crackdown on the tax arrangements of oil and gas companies has delivered the federal budget a $4.3 billion windfall amid warnings that cash flowing from the resources sector is set to dry up as commodity prices fall.

Data from the Australian Taxation Office, published on Friday, shows tax paid by the oil and gas sector jumped from $1.5 billion in 2021-22 to a record $11.6 billion in 2022-23. The sector accounted for more than 10 per cent of the almost $100 billion in tax collected from 4000 public and private companies.

Crackdown on oil and gas companies has dramatically lifted the amount of corporate tax paid.Credit: Getty Images

Chevron Australia, which in 2020-21 paid $30 million in tax on $9.2 billion of revenue, is now one of the nation’s single largest taxpayers. In 2022-23, it paid $4.3 billion in tax on $24.2 billion of revenue.

ExxonMobil, which didn’t pay income tax in 2020-21 on $15.5 billion in revenue, paid $844.5 million in income tax in 2022-23 on $25.7 billion in revenues. Woodside, which in 2020-21 did not pay tax on $6.7 billion of income, paid $2.7 billion in tax on $24 billion of income in 2022-23 plus $936 million in petroleum resource rent tax.

The ATO estimates that of the $11.6 billion in tax paid by oil and gas companies, $4.3 billion was due to its earlier actions against several companies that had been found to artificially inflate their Australian costs in a bid to reduce their tax.

ATO deputy commissioner Rebecca Saint said the legal action of recent years against oil and gas companies would pay longer-term dividends as they continued to pay tax.

But Saint said the surge in revenues from the resources sector most likely peaked in 2022-23, as prices for a range of commodities including iron ore, oil and coal have since started to ease.

“This is really the peak of that commodity price cycle,” she said.

Of the top 20 corporate taxpayers – which combined paid a record $49.5 billion in tax – all but five are in the resources sector.

The single largest corporate taxpayer was Rio Tinto, which paid $5.8 billion, while fellow mining giant BHP paid $5.5 billion. Mining companies Glencore Investment ($4.8 billion), Fortescue ($3.5 billion) and Yancoal ($1.6 billion) were also in the top 20.

Two companies connected to billionaire Gina Rinehart, Roy Hill Holdings ($1.2 billion) and Hancock Prospecting ($930 million), made the list.

The nation’s four largest banks, led by the Commonwealth Bank paying $3.5 billion in tax, remain in the top 20. But as a share of the total tax paid by the top 20, banks continue to fall, replaced by resources.

The ATO’s tax avoidance taskforce, begun in 2016, has now raised $33.2 billion in extra tax revenues from multinational businesses plus large public and private entities. The taskforce, which received an extra $1.2 billion in funding for the next two years in this year’s budget, employs 2500 staff.

The report confirmed that some of the world’s biggest tech companies still pay little tax.

Apple paid $142 million in tax on $12.6 billion in total income and $481.1 million in taxable income; Facebook paid $38 million in tax on $1.3 billion in total income and $126 million in taxable income.

Google Australia paid $124.1 million on $2 billion in income and $449 million in taxable income, while Amazon paid $125.5 million in tax on $6.6 billion in income and $419 million in taxable income.

Some of the nation’s most prominent companies did not pay tax in 2022-23.

Qantas Airways declared $402 million in taxable income on $19.2 billion in total income but paid no tax. Insurance Group Australia, which includes household name NRMA, had income of $15.9 billion and $150 million in taxable income but paid no tax.

Two large oil and gas companies, Ichthys ($12 billion in income) and Australia Pacific LNG ($11.3 billion), had no taxable income and paid no tax.

Other companies not paying tax were Ford Motor Company ($4 billion in income), Transurban Holdings ($3.4 billion), Toll Holdings ($3.7 billion), Tabcorp Holdings ($2 billion) and Star Entertainment ($1.9 billion).

Saint said there were many reasons a company did not pay tax.

“While there are legitimate reasons why a company may pay no income tax, the Australian community can be assured we pay close attention to those who pay no income tax to ensure that they are not trying to game the system,” she said.

Among media companies, Nine Entertainment Media (owner of this masthead) paid $88.6 million in tax on $3.3 billion in total income and $341.6 million in taxable income.

Neither News Australia ($1.9 billion total income) nor Seven West Media ($1.6 billion total income) paid any income tax. News Australia earnt $199 million in taxable income.

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