The report highlights the significance of tax and revenue transparency for good corporate governance and responsible business practices. It discusses the importance of tax justice in addressing the climate crisis, achieving Sustainable Development Goals (SDGs), and reducing inequality, especially in the context of the COVID-19 pandemic. Key findings indicate that ASX listed companies are lagging behind global peers in tax and revenue transparency measures. The report provides a detailed assessment of the top 20 ASX listed companies in mining and oil and gas sectors, comparing their practices to international standards.

Methodology

The research focuses on the top 10 ASX listed companies in both the mining and oil and gas sectors, based on market capitalisation. It uses publicly available data, including company websites, sustainability reports, ATO data, and ASX listings, to benchmark companies against a series of best practice indicators.

Tax and revenue disclosures of ASX listed mining, gas and oil companies

The report finds that ASX listed companies are not required to disclose payments to governments on a project-by-project level, which limits transparency. The Natural Resource Governance Index highlights Australia’s lagging transparency compared to other high-income countries. The report calls for mandatory disclosure laws to improve transparency and accountability.

Tax Transparency Code

The voluntary Tax Transparency Code (TTC) introduced by the Australian Government has seen declining participation from companies. The TTC aims to encourage businesses to disclose their tax affairs, but its voluntary nature and lack of accessible data limit its effectiveness. The report provides a detailed analysis of the participation rates and practices of ASX listed companies under the TTC.

Corporate Tax Transparency Report

The Corporate Tax Transparency Report (CTTR) by the ATO publishes aggregate data on corporate income tax but lacks detailed project-level information. This makes it difficult for stakeholders to assess the full economic contribution of companies. The report highlights discrepancies in tax payments by large ASX listed companies and calls for more granular reporting.

Country-by-Country reporting

Australia’s implementation of OECD’s Country-by-Country (CbC) reporting only applies to groups with a global income exceeding AUD 1 billion, leaving many ASX listed companies exempt. The ATO shares CbC reports with other tax authorities but does not publish them, limiting public access to vital information.

The Extractive Industries Transparency Initiative

The EITI is a voluntary global standard for the good governance of oil, gas, and mineral resources. The report discusses the benefits of EITI participation and the current status of ASX listed companies in relation to EITI standards. It calls for Australia to implement the EITI and improve transparency in the extractive sector.

Mandatory disclosure legislation

Mandatory disclosure laws in other jurisdictions, such as the UK, EU, and Canada, have significantly improved transparency in the extractive sector. The report advocates for similar legislation in Australia to level the playing field and enhance accountability.

Global Reporting Initiative

The Global Reporting Initiative (GRI) provides standards for sustainability reporting, including a new tax standard, GRI 207. The report compares GRI 207 with EITI and mandatory disclosure laws, noting areas for improvement and encouraging companies to adopt comprehensive tax transparency practices.

Other transparency measures

The report highlights the importance of a public beneficial ownership register and the need for companies to disclose political donations, contributions to industry associations, and the use of tax havens. It provides an assessment of ASX listed companies’ practices in these areas.

The role of investors

Investors have a crucial role in promoting tax and revenue transparency by engaging with companies and advocating for better disclosure practices. The report emphasises the importance of transparent tax practices for long-term investment risk management and the overall sustainability of the business environment.

Recommendations

• Australian Government: Introduce legislation for mandatory project-by-project tax reporting, implement the EITI, and re-start the multi-stakeholder group.
• Investors: Engage with companies and regulators to advocate for greater transparency, support mandatory disclosure legislation, and promote fair tax practices.
• Companies: Report payments to governments on a country-by-country and project-by-project basis, support a public beneficial ownership register, and disclose all political donations and contributions.