Data reveals mining giants and banks paid the most tax but other companies avoided making ATO payments

Mining giants and banks coughed up the most tax in 2021-22, but more than 800 companies paid nothing at all, according to the Australian Taxation Office.

Mining giants BHP and Rio Tinto paid a quarter of all corporate income tax in Australia for the 2021-22 financial year, but more than 800 large companies paid no tax at all, new data has revealed.

The Australian Taxation Office’s ninth corporate tax transparency report covered 2713 corporate entities.

They included 1496 foreign-owned companies with an income of at least $100m, 590 Australian public entities with an income of at least $100m, and 627 Australian-owned resident private companies with an income of $200m or more.

The report found the amount of tax collected increased due to rising mining profits and higher oil prices, but 831 companies did not pay any tax.

Various reasons were given, including companies making an accounting loss or claiming tax offsets that reduced their tax bill to nil.

The ATO noted it was similar to ASX data, which showed about 20 to 30 per cent of ASX 500 companies reported a net loss to their shareholders.

Rio Tinto paid $9.1bn in tax. Picture: NCA NewsWire / Sharon Smith

“The fact that an entity pays no income tax does not necessarily mean that they are not meeting their obligations,” ATO deputy commissioner Rebecca Saint said.

“Tax is paid on profit, not gross income. Even entities with large revenue streams may not make a profit for a variety of reasons.

“There are legitimate reasons why a company may pay no income tax. For example, they may not have made a profit for the year or may be in the start phase of their business.

“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.”

In total, companies paid a record $83.8bn in income tax – up 22 per cent from the previous year and almost 50 per cent higher than two years ago.

Ms Saint said the tax boost came from the mining sector, reflecting strong commodity prices.

“The 2022 income year was the first year that the mining sector paid more tax than all other sectors combined – something we haven’t seen in the history of the CTT report,” she said.

“In fact, the mining sector paid more tax in 2021-22 than the total tax from all sectors in the each of the first three years of CTT reporting.”

Since the Tax Avoidance Taskforce was set up in 2016, more than $27.7bn had been collected in additional tax revenue from multinational enterprises and businesses.

In 2022-2023, the ATO said a record $6.4bn in tax revenue had been secured from public and multinational businesses.

The Commonwealth Bank paid almost $3bn in tax. Picture: NCA NewsWire / Nikki Short

WHAT THE BIG COMPANIES PAID:

• BHP Group – $9.5bn
• Rio Tinto – $9.1bn
• Fortescue Metals Group – $3.5bn
• CBA – $3bn
• Westpac – $2.2bn
• BHP Iron Ore (Jimblebar) – $1.9bn
• NAB – $1.6bn
• ANZ – $1.6bn
• Mitsubishi Development – $1.4bn
• Roy Hill Holdings – $1.4bn

Originally published as Data reveals mining giants and banks paid the most tax but other companies avoided making ATO payments