The taxation of multinational enterprises is not just a matter of concern for Australia and other OECD countries, it also a matter of concern for resource-rich developing countries. Many of which are dealing with what is known as the ‘resource curse’ where countries rich in oil, gas and minerals are often found to have lower economic growth, greater poverty and inequality and more conflict and instability than countries with fewer natural resources. Although multinational enterprises, including Australian entities, make profits from the exploitation of resources, host countries, and local communities in particular, can actually become poorer when large-scale projects take place on their lands especially if those companies avoid paying tax.

Tax avoidance in resource-rich countries should be of concern to a government that is investing heavily in its Mining for Development program which advocates resource extraction as a development pathway for resource-rich developing countries…