Whistleblowers who help expose tax evasion and fraud would be rewarded with a share of any funds recovered by authorities, under a plan aimed at cracking down on corporate tax dodging.
The Tax Justice Network, an alliance of non-profit organisations that campaigns against tax havens and for tax reform, wants Australia to adopt laws modelled on the False Claims Act in the US, which hands whistleblowers between 15 and 25 per cent of money recovered as a result of their actions.
Mark Zirnsak, from the Tax Justice Network, said the laws had resulted in a dramatic spike in fraud detection in the US after they were amended in 1986. Canada recently flagged it would adopt similar laws, but Dr Zirnsak said there appeared to be reluctance to introduce such rewards in Australia.
"The issue here is that, particularly for companies engaged in fraud and tax evasion, if someone blows the whistle there's a fair chance they will lose their job and they may have trouble getting work elsewhere," said Dr Zirnsak, also the director of the justice and international mission unit at the Uniting Church. "It gives people a significant incentive for blowing the whistle."
Dr Zirnsak pointed to the $US104 million paid to banker Bradley Birkenfeld last year, after he exposed the role played by Swiss bank UBS in helping tens of thousands of American citizens evade taxes. Mr Birkenfeld's information helped recoup more than $US5 billion in back taxes, fines and penalties.
The Tax Justice Network also called for Australia to launch a public register of the ultimate owners of every company, in a bid to halt the use of shell companies to shift profits to low-tax jurisdictions.
It has reiterated the need for so-called country-by-country reporting, under which companies detail the taxes and other payments made to governments in each country where they operate.
The recommendations were made in a submission to a Treasury issues paper examining ways of clamping down on tax avoidance by multinational companies.
Assistant treasurer David Bradbury has warned that Australia's corporate tax base is under threat from aggressive tax planning by multinational companies, singling out technology giant Google.
The OECD will present a draft action plan on base erosion and profit shifting to the G20 finance ministers meeting in July.