Coalition to create public register to reveal true owners of shell companies

The Turnbull government will create a public register revealing the identities of the beneficial owners of shell companies in an effort to quell mounting public outrage about multinational tax avoidance in the countdown to the federal election.

The creation of the register – which will be announced within weeks ahead of an international tax avoidance and evasion summit convened by the UK prime minister, David Cameron, in London in mid-May – will bring Australia into line with G20 commitments on transparency.

The assistant treasurer, Kelly O’Dwyer, confirmed that Australia will agree to establish the register in an interview with Guardian Australia. “We agree there needs to be a registry of beneficial ownership in our country,” O’Dwyer said.

“It does improve transparency. It means that the public and law enforcement agencies know who ultimately controls the company. It means it is a lot easier to expose wrongdoing or fraudulent conduct. It make it much easier to disrupt illicit financial flows and it makes it much, much harder to engage in tax avoidance.”

Labor has yet to commit to a register. The shadow assistant treasurer, Andrew Leigh, said earlier this month the opposition would “carefully consider proposals for making information regarding all companies available on a public register” but he stopped short of making a specific commitment.

The government’s move comes in the wake of revelations in the Panama Papers that more than 800 Australians were on the files of Panama–based law firm Mossack Fonseca – and amid a strong voter backlash about businesses not contributing their fair share of tax.

The UK government will require the disclosure of the beneficial owners of companies in a public register from June, despite complaints from British business. The move by the Turnbull government is also unlikely to be popular with big business in Australia.

O’Dwyer said Australia’s corporate watchdog, Asic, had trace powers to establish the identity of beneficial owners but the current system was “clunky”.

She told Guardian Australia it was “critical that we ensure the integrity of our tax base in Australia and we know we have to cooperate with international jurisdictions in order to properly achieve that aim”.

The assistant treasurer also flagged stronger actions if “non-compliant jurisdictions” refused to sign up to G20 standards on tax transparency. “We certainly agree that further action should be taken by the international community if they do not do that,” she said.

O’Dwyer declined to specify what stronger action might mean but there have been widespread calls to outlaw shell companies or to apply sanctions to countries that refuse to take action.

With Labor campaigning vociferously ahead of the imminent election on the theme of making business pay their fair share, the government is expected to use the looming budget to pursue a second round of multinational tax avoidance measures.

There have been reports the government is contemplating another round of changes to thin capitalisation rules, making it harder for multinationals to load debt into their Australian operations.

O’Dwyer declined to comment on any budget specifics but on thin capitalisation she noted policymakers needed to be attentive to business practices and evolve to protect the integrity of the tax system. “Nothing stands still,” she said. “We need to constantly evolve.”

It is not clear whether the government will forecast a specific revenue figure on 3 May for the multinational tax measures, or follow the practice it followed in last year’s budget of declining to calculate a figure.

The assistant treasurer also pointed to more aggressive enforcement activity accompanying policy changes. She said the head of the Australian Taxation Office, Chris Jordan, had made his intentions clear in recent months.

“We are not going to be treating all taxpayers with the same level of patience when the taxation office requests information,” O’Dwyer said.

“There are big multinational companies who have got teams of people who can respond very quickly to requests from the ATO and should, and they haven’t always over a period of time. The ATO has said, ‘now we are going to be very tough on you, we are going to raise assessments on you’.”

During an appearance before a Senate committee on Thursday, Jordan noted that the now-infamous law firm at the centre of the Panama Papers leak was not a “one off”.

The tax commissioner said there were dozens of other firms running similar operations around the world. He also said Mossack Fonseca hadn’t just been used for tax minimisation strategies – it had been used to conceal and aid criminal behaviour too.