Australia to big pharma: Pay more taxes
- A report, which was written about in the Syndey Morning Herald, revealed that the five biggest supliers of publicly subsidized drugs paid a total of $50 million in taxes on $5 billion in revenues.
- Australia's Senate committee is holding a public hearing on July 1 to discuss pharma companies' tax avoidance.
- Tax-management practices that are being scrutinzed include transfer pricing, in which a company charges itself higher taxes on imported products to reduce taxes, and also booking royalties in lower tax areas.
The companies included in the report include Pfizer, Sanofi-Aventis, AstraZeneca and Johnson & Johnson. These companies are the focus of the public meeting because of the size of their revenue base, versus their tax output. For example, Pfizer had more than $2 billion in revenues, yet paid less than $2 million in local taxes. And it has been noted that $600 million in revenues were from Australia's Pharmaceutical Benefits Scheme (PBS), which subsidizes prescription drugs for residents of Australia.
Pharma companies are not the only companies being targeted for questionable tax-management practices. The Australian government has also cracked down on multinational tech companies, such as Google and Apple.