BHP Billiton (ASX:BHP), the world’s biggest miner, showed Wednesday it disbursed $7.3 billion ($A10.30 billion) in taxes, royalties and other payments to governments in countries where it operates in the 2015 financial year.
In its first ever taxes paid report, the firm made it evident it paid the vast majority of such amount in its home country Australia, showing it gave US$5.2 billion to the country’s governments, state and federal.
But the report was not all about figures. The Melbourne-based mining giant also defended the use of a Singapore marketing hub to minimize its tax payments, as it paid no taxes there. However, it added that was not the only reason for using the island state as a commodities trading hub.
“(Singapore) has a very attractive tax rate. We’re not ashamed of that. Obviously we would like to minimize the amount of tax that we pay, so it is part of the attraction of Singapore,” chief financial officer Peter Beaven told a news briefing, according to Reuters.
BHP Billiton’s chief financial officer Peter Beaven.
The executive also took the opportunity to warn against the dangers of governments changing tax laws unilaterally as part a global tax transparency push, saying the that changes could become “chaotic” and result in firms effectively being taxed twice.
BHP, which came under fire earlier this year over allegations of tax avoidance, says its global adjusted effective tax rate was 31.8%, well above the Organization for Economic Co-operation and Development (OECD) average corporate income tax rate of 25%.
The resources giant plans to cut capital and exploration expenditure by $2.5 billion this financial year to $8.5 billion, amid a global commodities slump.
The decision was triggered by falls in global prices of commodities and crude oil amid concerns about a supply glut and falling demand in China’s troubled economy.
The underperformance also forced BHP’s chief executive Andrew Mackenzie to take a more than 40% pay cut.
The company began to voluntarily disclose its tax and royalty payments in 2000 and since then it has progressively increased the detail in these disclosures.
Source: BHP’s Economic contribution and payments to governments report 2015.
Comments
Tony K
I suppose what BHP should be ashamed of is the deal with the Singapore government that required BHP to dismiss workers in Australia, Holland and elsewhere and to employ new employees in Singapore, with a strong preference for Singaporean citizens. This is part of a skills transfer to Singapore that is to the detriment of Australia and other nations that are home to BHP’s assets. This is why the low tax rate is available to Singapore.
Btw, headline is misleading, it refers to “Taxes”, the figure itself is composed of royalties and other payments.