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| Well that's a (tax) relief? |
paraclete |
12/20/06 |
Iraq kickbacks tax deductible
December 20, 2006 - 12:57
A tax office investigation has found the $390 million AWB funnelled to Saddam Hussein's regime were not bribes and could rightly be claimed as tax deductions.
The Australian Taxation Office launched an inquiry in August after claims emerged at the inquiry into the Iraqi kickbacks scandal about how AWB treated the payments in its accounts.
Commissioner Terence Cole, QC, heard suggestions that AWB claimed as a tax deduction the kickbacks it funnelled to the Iraqi dictator's regime in breach of the United Nations' oil-for-food program.
Following the tax office investigation, AWB issued a short statement today saying it had been cleared of any wrongdoing.
"AWB has received written confirmation today from the Australian Taxation Office (ATO) stating that the ATO has finalised the AWB Group business audit for the years ended 30 September 2000 to 2004 inclusive in relation to payments under the oil-for-food programme," the company said.
"The ATO accepts that for the reasons set out in the Cole inquiry report payments made by AWB under the United Nations Oil-for-Food program do not constitute bribes to foreign public officials for the purposes of the Income Tax Assessment Act 1997."
AWB's former chief financial officer Paul Ingleby told the Cole inquiry earlier this year that the wheat exporter had claimed up to $300 million in kickbacks as a tax write-off.
Under questioning by counsel assisting the inquiry John Agius, SC, Mr Ingleby agreed that the payment of "trucking fees" - the kickbacks demanded by Saddam's regime - was treated by AWB as an expense and therefore a tax deduction.
An ATO spokeswoman said she could not comment on the inquiry into AWB's tax affairs.
"Under the (income tax and privacy) law we can't comment on individual taxpayers and that includes companies," she said.
"But companies or individuals are free to talk about it themselves."
It is not the only favourable decision by the ATO for AWB and its former executives.
Disgraced AWB figure Trevor Flugge escaped paying tax on almost $1 million in salary and allowances paid to him by an Australian government aid agency for his work in Iraq after the Howard Government shepherded a new tax law through Parliament late last year.
The law, exempting Mr Flugge and scores of other Australia aid workers in Iraq from Australian income tax, was cleared through Parliament just weeks after the Prime Minister announced the Cole inquiry into the AWB scandal last December.
As a result, Mr Flugge earned $978,776 tax free from AusAID after being hired by the Howard Government to work for Iraq's occupation government in April 2003.
Mr Flugge was severely criticised in the Cole report for being deeply involved in AWB's payment of almost $300 million in kickbacks to Saddam Hussein's regime under the UN's oil-for-food program before the war.
AAP with Marian Wilkinson
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It's nice to know that double taxation won't apply here, but I'm sure this rubs salt into the wounds of the US exporters who erronously claim that the AWB somehow cheated them out of the Iraqi market, afterall, they would have been trading with the enemy if they had been involved. |
Clarification/Follow-up by tomder55 on 12/22/06 12:23 pm:
If it were a bribe it wouldn't be deductable, but the ATO has no power to overturn the court's decision. Saddam taxed the program, but the american wheat producers see it as a bribe
you can characterize it that way if you wish. Bottom line is that AWB was dealing with Saddam in violation of UN sanctions .
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