Australia’s Tax Overhaul Yields Billions from Big Oil

Australia has seen a record influx of tax revenue from the oil industry due to significant changes in tax legislation. In the fiscal year 2022-2023, the Australian Tax Office collected A$11.6 billion (approximately $7.62 billion) from the oil and gas sector, a substantial increase from A$1.5 billion in the previous year.

Major companies, including Woodside and Exxon, had not paid any taxes in 2021-2022. However, after the legislative amendments, they contributed billions in the latest fiscal year. Exxon’s tax liability reached A$844.5 million on revenues of A$25.7 billion, while Woodside paid A$2.7 billion on revenues totaling A$24 billion.

The ATO noted that A$4.3 billion (about $2.8 billion) of the total collection directly resulted from reforms aimed at improving tax collection from the sector. Despite this impressive haul, officials indicated that 2022-2023 may represent the peak as the industry faces a downturn.

The government has focused on oil and gas companies since 2016 when then-Treasurer Scott Morrison pointed out that revenues from the petroleum resource rent tax (PRRT) had halved since 2013. An investigation revealed that operators of a significant gas project had avoided paying around A$3.3 billion (approximately $5 billion) in taxes through various deductions, some of which were ineligible. Companies such as Chevron, Shell, BP, and Woodside, along with BHP Billiton, were implicated in this tax avoidance strategy.

Story via OilPrice.com