IKEA opened its first store in Canberra this week, welcoming in thousands of new customers. Like any other IKEA store there were thousands of products on offer. Maybe you'd like a Billy bookcase for $69, a Lack coffee table for $29.99 or perhaps a corporate tax avoidance of $269 million — wait, what? Not long after the opening of the anticipated Canberra store, one group placed these faked price tickets around the store, tallying up how much IKEA's tax avoidance could be costing Australia.
Image via SydneyTom on Imgur
Instead of listing the features of a piece of cheap Swedish furniture, these price tags instead list what IKEA's low tax rate could be costing Australia:
•During the period from 2002 — 2013, IKEA's Australian stores made over $1 billion in profit and paid less than $31 million in tax. •That's a tax rate of 3%. The corporate tax rate in Australia is 30%. Imagine what we could do with $269 million. •Find out more at www.fairgoforcanberra.org.au/ikea
The website link mentioned in the ticket takes you straight to a petition, calling on the Turnbull government to close corporate tax loopholes instead of raising the GST:
By avoiding real action on corporate tax avoidance and instead focusing on raising the GST, the Turnbull Government is protecting the wealthy at the expense of everyday Australians. Research has shown that raising or broadening the GST will hit our lowest income earners the hardest, producing greater inequality.
While IKEA has done some cool things in recent years like investing in renewable energy, flatpacking refugee shelters and buying up forests for preservation, it may not be doing as well for the Australian economy. Not only could the reduced taxes coming in mean the government may be forced to raise GST and raise prices for Australian consumers, but with international companies paying less than their fair share of tax, smaller local businesses are finding it hard to compete.