Facebook 'verging on moral bankruptcy' over tax avoidance

Mariam Cheik-Hussein
By Mariam Cheik-Hussein | 22 January 2021

Facebook has been accused of being on the “verge of moral bankruptcy” over the level of tax its pays in Australia for parts of its business.

Speaking at a Senate hearing on the news media bargaining code, senator Rex Patrick criticised the social media giant for funneling some of its revenue to Ireland.

Currently, advertising revenue that Facebook Australia makes from “boosted” ads by local businesses goes to Ireland, meaning no tax on it is paid to the Australian government.

Patrick labeled this particular mechanism as morally improper and one that goes against Facebook’s “social licence”.

“This is a service you charge in Australia and provide to Australians, but you avoid completely the paying of tax, you say, on the basis of compliance with international law. I’m not questioning that, I'm saying that socially, that's not moral,” Patrick says.

“In terms of social licence, there's a failure on the face of Facebook in respect to this particular conduct that indeed prevents the Australian government taking some of the tax from that revenue and perhaps doing something with our regional media outlets.”

According to media reports, Facebook paid $17 million in income tax for 2019.

"I think you are verging on being morally bankrupt in the way these tax affairs are conducted," Patrick says.

Responding to Senator Patrick, Facebook’s vice president of public policy Simon Milner said the company complies with Australia's tax arrangements.

“This is a matter for governments, and then it's up to companies to pay tax on the basis of the laws of the country and that’s exactly how we operate,” Milner says.

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