Corporate sector axe defies logic of falling tax receipts IF the government acknowledges that the fall in corporate tax receipts is the biggest issue for the budget bottom line, why on earth would it hit that sector even harder, further imperilling corporate tax receipts? The government's bid to pump companies for more tax could shrink the corporate tax haul in the long run, in any case, making it harder for the still ambitious revenue targets to be met. Rather than try and lift company tax revenues by cutting the company tax rate and bringing more economic activity to Australia, as the Henry review recommended, the government has announced a crackdown on "profit shifting" that it hopes will raise $4.2 billion over the next four years. Federal revenues are supposed to rise by about 7.5 per cent next financial year to $392bn, but they are highly vulnerable to assumptions and seemingly at odds with ringing corporate alarm bells. While company tax receipts fell by about $500 million this financial year, Wayne Swan is projecting they will grow almost 9 per cent next year, helped along by the shift from quarterly to monthly tax payments, which was announced last year. Big corporate taxpayer UGL is only one of a number of companies that have downgraded their expected revenues this week, at the same time Morgan Stanley's local chief Steven Harker is warning of a challenging five years.