National accuses Labour of playing catch-up on multinational tax

Labour leader Andrew Little says multinationals should be paying more

RELATED AUDIO: KPMG tax partner Bruce Bernacchi says extra taxes from multinationals will be a "rounding error" (Jun 13)

0
0:00 0:10

The Labour Party would target multinationals operating in New Zealand to ensure they don't avoid paying tax if it wins power and is targeting $600 million over three years through a "diverted profits tax," says leader Andrew Little.

A Labour government would increase funding to Inland Revenue to chase unpaid taxes and give it the power to impose tax "at a penalty rate if they believe that tax has been deliberately avoided," he said.

"Even on current tax settings, multinationals should be paying more. Labour is budgeting to collect an additional $600 million over three years. We will resource IRD's investigations unit to do their job properly with an additional $30 million injection each year, Little said in a statement. Mr Little said the UK has had a positive experience adopting the measures and companies such as Amazon were now booking their profits in the UK rather than in jurisdictions with lower tax requirements.

But National Party campaign manager Steve Joyce says the government announced it will collect an initial $100 million annually in additional multinational tax in the Budget two months ago and the Labour Party is now announcing it will collect an additional $200 milion a year "without any plan as to how to get there".

Mr Joyce says the government is completing consultation on three separate areas of work to ensure multinationals pay their share of tax on activities in New Zealand, in line with recommendations from the OECD working group on multinational tax.

"These areas cover companies that use artifically high interest payments to shift profits offshore, companies that artificially avoid having a taxable presence in New Zealand, and companies that exploit hybrid mismatches between different countries tax rules."

He says the government has a detailed plan on dealing with the issue and "Labour are simply playing 'me too'."

Mr Little also released an open letter written to multinational companies in which he invites them to a round-table meeting immediately after the Sept. 23 election, assuming Labour wins power.

"I intend to address the rising discontent among New Zealanders regarding multinational companies not contributing fairly," he says in the letter. "I invite you to attend this meeting and work together to ensure New Zealand is a fair place to operate and a great place to live. I look forward to discussing this with you further."

"A diverted profits tax is an important tool to encourage multinationals to behave appropriately and pay their fair share of tax like every New Zealander who works for a living," he said. "They don't have tricky accountants to help them dodge their obligations."

(BusinessDesk)


3 · Got a question about this story? Leave it in Comments & Questions below.


This article is tagged with the following keywords. Find out more about MyNBR Tags

Post Comment

3 Comments & Questions

Commenter icon key: Subscriber Verified

And the (huge) loser will be the New Zealand consumer.

Want to get their tax money? Compete on tax.

Tax is a cost. This eternal, deluded monty pythonesque search for the holy free lunch, will lose us all our basic freedoms (from each other) again, as it takes our high standard of living with it.

This is shaping up for the ideologically worst election in my voting lifetime, and it looking to be the first I withhold my party vote. In fact I'd love to see a 'no confidence' tick on the party vote side of the election form.

Reply
Share
  • 1
  • 0

Surely there is one major party you hate more than the other. That's the way to use your party vote.

Reply
Share
  • 0
  • 0

The irony is strong in this National party.

Reply
Share
  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7552 0.0031 0.41%
AUD 0.9372 -0.0035 -0.37%
EUR 0.6422 0.0007 0.11%
GBP 0.5745 0.0009 0.16%
HKD 5.8955 0.0223 0.38%
JPY 83.8110 0.1810 0.22%

Commods

Commodity Price Change Time
Gold Index 1260.6 10.730 2017-07-26T00:
Oil Brent 51.1 0.730 2017-07-26T00:
Oil Nymex 48.8 0.840 2017-07-26T00:
Silver Index 16.4 -0.083 2017-07-26T00:

Indices

Symbol Open High Last %
NZX 50 7710.6 7727.1 7710.6 0.01%
NASDAQ 6425.9 6432.4 6412.2 0.16%
DAX 12260.3 12341.0 12264.3 0.33%
DJI 21690.4 21742.7 21613.4 0.45%
FTSE 7434.8 7487.1 7434.8 0.24%
HKSE 27002.7 27169.2 26941.0 0.73%
NI225 20026.6 20176.4 20050.2 0.15%
ASX 5776.6 5799.6 5776.6 0.15%