Five-year trend analysis

Over the last 5 years, the increase in the number of entities in each industry in the corporate transparency population has been a key contributing factor to growth in income and tax paid across all segments. The exception is Australia’s Mining, Energy and Water segment, where commodity prices and export volumes have been key contributing factors in income and tax paid.

Over the 5-year period, all industries have grown their tax payable except Insurance and Banking, Finance and Investment. The Insurance segment has increased expenses over the 5 years due to a number of natural disasters. The Banking, Finance and Investment segment has restructured over the 5 years, increasing its costs.

The following figure illustrates the changes in tax payable by industry segment over 5 years. Tables 1 to 4 summarise the 5-year trends for tax payable, total income, taxable income, and entity counts.

Tax payable

Figure 9 shows the trend in tax payable by industry segment over the past 5 years. Table 1 summarises this data.

Figure 9: Tax payable by industry segment over 5 years

Table 1: Five-year trend of tax payable by industry segment ($ billion)

Total income

Table 2 shows the total income by industry segment over the past 5 years. Total income was $2,630.3 billion in 2021–22, an increase of 14.7% on the prior year.

Insurance and Manufacturing, Construction and Agriculture have both seen small growth in total income over the last 5 years, while the other segments have experienced stronger growth.

Income tax is applied to taxable income not total income. Total income generally includes all income received. Taxable income is the portion of total income that's actually subject to taxation. Deductions are subtracted from total income to arrive at taxable income. Deductions can vary from industry to industry. For example, retail could have a high percentage of deductions reflecting smaller gross profit margins. When commodity prices are high, mining companies can have a lower percentage of deductions relative to total income.

Taxable income

Taxable income is a company’s total income minus expenses. The amount of taxable income is affected by revenue growth and market conditions. For example, interest rate changes will affect a company’s borrowing expenses.

Table 3 shows taxable income by industry segment over the past 5 years. Taxable income was $341.4 billion in 2021–22, an increase of $84.9 billion or 33.1% on the prior year.

Insurance has experienced a decline in taxable income, as that segment faced challenging economic conditions and multiple natural disasters.

The Mining, Energy and Water segment is a major contributor to the overall increase in taxable income, with steady and consistent growth over the past 5 years.

The Banking, Finance and Investment segment had a rise in taxable income in 2021–22 as financial investments rebounded from the initial shock of COVID-19 in the prior financial year.

The taxable income of the Wholesale, Retail and Services segment increased as the aggregate level consumption of these services increased.

Count of entities

Over the 5 years, increases in the number of entities in each industry has been a contributing factor to income and tax paid. However, in the Mining, Energy and Water segment, commodity prices and export volumes have been additional key contributing factors to growth in this segment.

Table 4 shows the number of entities by industry segment over the past 5 years.