The tax collectors, a $6 billion team

It's nine o'clock on a Monday morning, always a frenetic time for George, the Caltex Tax Manager, and his team of eight people. The staff are working at keyboards, completely absorbed in what they're doing. Their desks are crowded with files, folders, papers and documents.

"We have to rely on legislation, rulings, guidelines, case law papers and so forth which we can't always access on screen," says George. "We also have to keep a lot of documents for the ATO."

Australia's second largest tax collector

"We have to find $80 million from our working capital every Monday"

The importance of what the team are doing belies the relatively small space they occupy on the twenty-third floor of Caltex's 2 Market Street office in Sydney. According to a recent PricewaterhouseCoopers survey, Caltex is Australia's second largest corporate tax collector, paying or collecting taxes of over $6 billion to government in 2007. This includes forwarding more than $80 million in excise from all fuel and lubes sales to Canberra every week.

"Every Monday we have to electronically remit to the tax office our excise collections from the previous week's sales," says George. "That occurs regardless of whether we get the money from our customers or not – we simply have to find that $80 million from our working capital every Monday."

Tax permeates every transaction Caltex enters into. And excise isn't all. The company must pay some $80 million again in GST to the federal government each month. Plus there's 30 cents in the dollar of profits before tax to be paid in income tax, so the more money Caltex makes the more the government takes.

On top of all that Caltex collects other taxes on behalf of government, like PAYG withheld from employees' pay, payroll taxes, workers compensation premiums, local taxes for service stations, land taxes and others. As an organisation it must handle an astonishing 60 company "taxing points" with revenue authorities.

Huge sums

"These are huge sums we have to account for," says George. "And if we get any of that wrong we face severe financial penalties of up to 25 per cent."

Not surprisingly the team depends heavily on its systems. Take excise. Caltex must work out what proportion of fuel is consumed in Australia and what goes offshore, and what proportion is subject to buy-sell deals with other refiners. Generally, those supplies are not subject to excise until they're sold by the other company.

"We do a lot of work to make sure our systems stay compliant," says George. "I would have the equivalent of one full time person involved on excise compliance for one day a week, checking, reconciling and preparing the fast transfer to the tax office."

In most organisations the compliance function is split within the various accounting roles around the company. At Caltex it's centralised in George's team which he believes results in greater efficiency and control.

George has been in the job since 2000 and is a hands-on manager, overseeing the running of the department on a daily basis and getting involved in just about everything that happens in it.

What he refers to as his "dynamic team of young professionals" does more than collect tax and remit it to government. They also give tax advice on many transactions and projects entered into by the business, provide training to the business on tax issues, implement new systems, policies and procedures for changes to the law and deal with ongoing tax audits by various revenue authorities. The team is currently managing an excise audit, two GST audits and finalising two payroll tax audits. To stay good at what they do, they must ensure they remain on top of constant changes to tax legislation.

Does he enjoy the work? Sure, he says. He likes change. "There's always something new happening here. It gives me understanding of the business I wouldn't otherwise get. I come across finance, marketing and corporate issues all the time. This is a very, very interesting role for people who like tax, and I do."

Any regrets? He'd love to have a tidy desk policy, and to include himself in it.

"But I just can't."

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