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2014-10-03

SingTel

SingTel in the spotlight over taxes

Optus has reacted sharply to reports that suggest its parent company, SingTel, is not paying its fair share of taxes in Australia.

According to a report released by the Fair Tax Justice Network and the trade union, United Voice, and reviewed by University of Technology Sydney tax expert Dr Roman Lanis, 84 percent of the top 200  companies listed on the Australian Stock Exchange are paying less than the 30 percent statutory company tax rate that applies in Australia.

And Optus parent SingTel was named as one of the worst offenders, with the report claiming that the company has an effective tax rate of only 9% globally. On this basis, it was ranked No.2 in terms of its negative impact on the Australian tax base.

Optus has completely rejected the claim, saying it is based on an incorrect way of calculating SingTel’s tax liabilities. It appears that the report has simply taken SingTel’s total global profits and applied the Australian tax rate to them to establish what SingTel “should” be paying here.

But as Optus points out, SingTel operates in 25 different countries with varying tax regimes. And while Singapore’s may be one of the most generous (and least transparent), SingTel is based there because of its history, not as a result of a tax minimisation strategy.

More detailed information and analysis would be required to establish whether or not SingTel is paying its way in Australia, tax-wise.

Meanwhile, an equally important issue for the local telecommunications industry is the proportion of Optus’ profits that are reinvested in Australia, as opposed to being repatriated to Singapore to fuel SingTel’s regional expansion.

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