The central business district (CBD) of Melbourne can be seen from the area located along the Yarra River called Southbank located in Melbourne, Australia, July 27, 2016.

The central business district (CBD) of Melbourne can be seen from the area located along the Yarra River called Southbank located in Melbourne, Australia, July 27, 2016. Reuters/David Gray

About one in three of Australia’s biggest businesses paid no tax in the 2015-16 financial year, recent data from the Australian Taxation Office (ATO) has shown. Small businesses are being targeted too as there have been concerns of using cash to avoid their fair share of tax and superannuation obligations.

Australia celebrated the legalisation of same-sex marriage last week, and as it happened, data was released showing that some companies, the ones that earned $100 million or more, did not pay tax. Out of 2,044 companies, 732 were found guilty of such offense. Some paid relatively small tax compared to profits.

Small business ombudsman Kate Carnell has said the nation’s businesses, whether big or small, needed to pay its share. She maintained that not paying correct taxes is not fair for those doing the right thing.

Carnell admitted to receiving complaints from businesses who said competitors were "cash only,” which meant they were paying their staff in cash. She added that if Australian businesses do not contribute their correct tax, there would be no hospitals, roads or schools.

Small businesses to be audited

An operation to prevent businesses in Australia from using cash to avoid paying the correct tax has begun. It targeted up to 189 small businesses in Canberra earlier this year. Of the 189 local businesses, 22 will be audited. The ATO said it will take further action with 75 small businesses.

The tax office has recorded breaches, which included paying staff cash on Sundays. Such habit makes businesses avoid paying penalty rates.

Another violation found was not recording transactions to avoid reporting correct income. Some only provide EFTPOS on certain days. There are some cases when the businesses' turnover determines rent, which meant some businesses could avoid paying rent.

Call for fairer tax system

For businesses that need advice on how they could meet their tax obligations, Canberra Business Chamber chief executive Robyn Hendry said her organisation could help. She believed that small businesses needed to look after their employees. "I do know that at times businesses have failed to meet all their obligations by mistake," The Canberra Times reports her as saying.

Shadow assistant treasurer Andrew Leigh has reacted to the ATO data, saying it shows the government has to make the tax system fairer. He argued that the real problem the country is facing is multinational tax avoidance and tax havens, adding that everyone must obey the law.

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