Wesfarmers urges Aldi to sign tax code in ‘corporate peer pressure’
Coles has urged its German rival Aldi to sign up to a new tax transparency code that will lead to more big businesses, particularly multinationals, releasing detailed information about the tax they pay.
Aldi has yet to sign up to the Voluntary Tax Transparency Code, which targets more than 1500 businesses with turnover of $100 million and follows public anger over large multinationals engaging in aggressive tax avoidance.
The government is “encouraging” all companies to adopt the code this financial year, and will make it mandatory if too few companies come forward.
Wesfarmers, the owner of Coles and other retail chains such as Bunnings and Officeworks, has signed up. Wesfarmers chairman Michael Chaney told Fairfax Media: “I would encourage all supermarket operators to do so.”
Australia’s biggest retailer Woolworths said it “intends on becoming a signatory to the taxation transparency code”.
“It is worth noting that as a large Australian listed company that conducts the vast majority of its business within Australia, our tax arrangements are already transparent through our reporting and publicly available tax and ASIC [Australian Securities and Investments Commission] documents,” a Woolworths spokeswoman said.
With an estimated 10 per cent market share of Australia’s $90 billion-odd grocery market, Aldi is one of the country’s biggest retailers. But, unusually, it is structured as a limited partnership.
This means Aldi is not required to be audited nor to disclose its accounts to the corporate regulator, ASIC (if it did, its accounts would be available to the public and competitors). Instead, limited partnerships are registered with the states and territories.
Aldi told Fairfax Media it was “assessing the impact of implementing the Voluntary Tax Transparency Code on its Australian operations”.
A spokeswoman for the chain added that it “currently complies with all its statutory tax reporting obligations”.
This is not the first time tensions have flared about Aldi’s transparency and tax record.
Wesfarmers chief executive Richard Goyder last year said “someone should go and have a good look at how much tax Aldi pays in this country because I suspect they’re very profitable”. He also said Aldi should be “paying corporate tax in Australia and they should be very transparent”.
Aldi Australasia chief executive Tom Daunt responded, in a submission to the Senate inquiry into tax avoidance, that Aldi “does not engage in the inappropriate pricing of international related party transactions for the purposes of artificially reducing taxable profits in Australia”. He added that Aldi had a “very open and positive working relationship” with the Australian Taxation Office.
The Voluntary Tax Transparency Code was created with the input of business by the Department of Taxation. Other signatories include major banks ANZ, NAB and Commonwealth Bank, the big two miners BHP Billiton and Rio Tinto, property business Mirvac and investment firm AMP.
Paul Drum, head of policy at accounting body CPA Australia, said: “The list is growing of those that recognise the implications of a perception, one way or another, of not participating. That kind of corporate peer group pressure will lead to greater transparency and less aggressive tax planning.”
