The corporate tax base continues to be heavily reliant on a handful of very profitable businesses.
The ATO said firms with income of more than $5 billion represented about 2.5 per cent of all the firms in its corporate tax transparency report. They accounted for $30.9 billion or 55 per cent of all the tax payable.
Amongst that group, the mining sector accounted for 40 per cent of tax while another quarter was paid by banks.
Mining tax collections had fallen to just $6.3 billion in 2015-16 but last year reached $22.9 billion, with almost all of the increase due to soaring iron ore prices.
ATO deputy commissioner Rebecca Saint said the figures confirmed the growing reliance on tax collections from the mining sector.
“Total income tax paid increased $3.8 billion from 2017-18, which can be attributed to the mining and resource sector and increases in commodity prices,” she said.
“All other sectors saw the first decline in income tax payable since the first report was published, partly reflecting the downturn in non-mining company profits during the 2018-19 financial year.”
Not all resource companies are doing well.
While there are now 11 firms paying the petroleum resource rent tax, total collections fell $100 million to just over $1 billion due to the drop in global oil and gas prices. Those prices fell far more through the 2019-20 financial year.
The ATO is expecting the amount of PRRT payable to continue to fall and then remain stable, in line with oil prices.
Of companies not paying tax, there was a fall in the proportion of foreign-owned and Australian public firms while among Australian private entities there was a small increase.
Mining remains the industry with the highest proportion of firms that did not pay tax at close to 50 per cent. It partly reflects the nature of the industry and high upfront exploration and development costs.
The ATO said 13 per cent of firms reported a loss, another 6 per cent reported an accounting profit that turned to a loss after deductions, 3 per cent had offsets such as tax incentives that wiped out their tax liability and 11 per cent used previous year losses to deduct against their 2018-19 profit.
The press by the Turnbull and then Morrison governments to wring tax out of multinationals that booked sales in Australia but did not pay tax is starting to work.
The report shows 44 multinationals have restructured, reporting $8 billion in Australian sales. Tax collections from this group is at least $100 million more than before the advent of the tighter laws around multinationals.
Ms Saint revealed the tax office was moving ahead with one assessment against a company through the diverted profits tax, which is aimed at firms that reduce their payable tax by shifting profits through a contrived arrangement with an overseas party.
“Over the last 12 months, a small number of diverted profits tax matters have advanced significantly with one progressing to an assessment,” she said.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.