The Australian Taxation Office has cut 4400 jobs in the past 19 months with one staff member telling a Senate hearing many of them were "our go-to" people.
On Thursday, the Community and Public Sector Union told the hearing into corporate tax avoidance Australia's tax collection would be hurt by the workforce reduction – a contrary line to the ATO's official view.
CPSU member Cathy Pugh, who worked in the international branch in Sydney and specialised in base erosion and profit shifting, said managers had been taking on more complex jobs from officers.
"It's mostly experienced staff with broad and in-depth experience in applying the law, running audits, building networks, detecting tax avoidance, building relationships with taxpayers and tax advisors," Ms Pugh said.
"These skills are particularly important in dealing with international tax avoidance.
"These people were our go-to people – and they're gone. There's a limit to how long this can be sustained."
CPSU president Alistair Waters said tax officers wanted loopholes closed, more stringent reporting requirements for big business and staffing levels to be restored.
"Our members are very concerned about the impact of cuts on the capacity of the ATO to effectively perform its role," Mr Waters said.
The ATO has received a 17.5 per cent cut to its workforce, according to the union's figures, while the organisation's corporate and international section had been reduced from 1400 to 1150.
CPSU said its members wanted the government to close off sub-section 25:90 of the Income Tax Assessment Act 1997, the clause that helped corporations to artificially reduce taxable profits.
"Australia is a low-taxing country and the question of revenue is a very significant one," Mr Waters said.
"Frontline officers fighting tax evasion tell us that transfer pricing, profit shifting and the use of multiple trust structures were among the most prevalent forms of tax avoidance.
"The cards are stacked against tax officers and in favour of those who seek to avoid paying their fair share. That is not the right way round. It's a rort that should end immediately."
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The CPSU's written submission to the committee said Australia's taxes were at 27.3 percent of GDP, "well below" the OECD average of 33.7 percent.
"Additionally, Australia's taxation revenue as a proportion of GDP has declined significantly over the last decade, from 30.4 per cent in the year 2000 to 27.3 per cent in 2012," the submission said.
"Over the same period, the OECD average has remained relatively steady, dropping only slightly from 34.3 per cent to 33.7 per cent."