Changes to multinational tax regime needed - Labour
The Government is set to crack down on multi-nationals like Apple, Google and Facebook that make huge profits in New Zealand but pay very little tax here.
As Newshub found out, the estimates of lost revenue vary widely, but experts agree that it adds up to hundreds of millions of dollars.
"My message to multi-nationals is, we're happy to have you so long as you pay your fair share of New Zealand-earned tax," Revenue Minister Judith Collins says.
Multi-nationals are using something known as base erosion and profit shifting, or BEPS, to minimise their tax bill and take profits out of the country.
But how much we're missing out on doesn't seem to be clear.
Labour revenue spokesperson Michael Wood says the figure is about $500m to $1b per year.
Geoff Nightingale, PricewaterhouseCooper tax expert, estimates the figure is several hundred million dollars per year.
And Ms Collins puts the figure at about $300m a year.
Whatever the figure, "that's a lot of support we could be giving our schools, our health system or our police officers that we're missing out on", Mr Woodhouse says.
As for who's not paying enough tax? The minister won't name names; Ms Collins says she can't go down that track.
The Government's changes would include limiting profits being sent offshore and restrictions on interest payments being use to shift profits offshore. IRD would have more power to assess tax obligations.
"There's some risk it'll find its way into the price of the goods and services they provide," Mr Nightingale says.
Ms Collins says the proposed changes would be a balancing act.
"We are a country that does require capital to come in from overseas to build our businesses and keep people employed, so we also don't want to send a message that we don't want multi-nationals because we do want multi-nationals."
Labour says changes are overdue.
"The IRD warned the Government about this issue five years ago, the last revenue minister said there wasn't any issue, now it's election year and we're seeing action," Mr Woodhouse says.
It's too early to know what multi-nationals think of the proposals., but Ms Collins is hoping to introduce new legislation to Parliament by the middle of the year.