Contributed by Ben Wilson
The notorious Adani is going to shift $3 billion from Adani’s planned Carmichael coal mine to the Cayman Islands, if the mine goes ahead.
Adani will be able to use holes in the tax system that allows a shelf company an “overarching royalty deed” that provides a $2-a-tonne payment, rising yearly by the inflation rate, beyond the first 400,000 tonnes mined in each production year for two decades.
The Australian government knowingly maintains this provision. On top of this, $2 billion of taxpayer’s money is to be handed over to him. Adani certainly has friends in high places.
Adani will avoid paying tax and small shareholders will lose out, as much less will be paid out in dividends.
It is business as usual for Adani, to operate through a web of companies and trusts to fleece the public, governments and his partners and this is no secret. Despite this, ministers and other politicians have failed to show any concern.
Such practices remain perfectly legal in Australia.
If the money laundering tax haven route is to be closed off the first step must be to change tax law to outlaw so that the present loopholes cannot be used and that specific practices are outlawed.
Unfortunately, nothing is done, which is a very strong indicator that the government believes that tax evasion, as long it is on a big enough scale, is something to support, not oppose.
The projected reduction in the company tax from 30 percent to 25 percent is meaningless, when the main players are left free to pay no or almost no tax. Paying the 25 percent would mean a major tax increase.
But we all know they won’t pay and get away with it.