Labour's Grant Robertson: Uber New Zealand tax bill 'a joke'

(Reuters)
(Reuters)

Labour's Grant Robertson says Uber's minuscule tax payment in New Zealand is a sign it's time the Government cracked down on multinational tax avoidance.

He says it's a joke Uber paid just $9000 tax despite earning $1 million in revenue in New Zealand, and if it wants to operate here it should pay what others pay.

"That's just not fair. I mean ordinary working people pay their taxes here every week. So should companies here, and the Government should crack down on those who don't," he says.

"It's everyday New Zealanders that are losing out, because the costs of goods and services provided by the Government will end up being carried by hard-working taxpayers rather than by the big multinationals.

"New Zealand can't sit on its hands and wait for multinational tax avoidance to be dealt with at the global level."

Uber, the app-driven ride-sharing service, is one of the fastest growing companies in the country.

Accounts filed with the Companies Office show Uber's New Zealand business used a complicated structure of international companies to reduce its New Zealand tax bill.

Massey University taxation expert Deborah Russell says while Uber's tax minimisation is "perfectly legal", it's also completely immoral.

"They're operating here in New Zealand, they're using all the resources here in New Zealand - from the educated population to the rule of law, even to the roads they drive on - so I'd like to see them paying a fair contribution towards that."

She says multinational companies like Uber are undermining confidence and trust in the tax system.

"A large part of our tax system operates on trust - on us trusting the Government, trusting that our neighbours are paying their tax. If we think that everyone is paying their fair share of tax then we pay our tax too, because it's part of what we all do.

"But if we look over and see these big multinational companies are just escaping tax, that undermines our trust in the system and our trust in each other."

Dr Russell says Uber has a "cunning" system of minimising the tax it has to pay.

"Every time you buy an Uber fare, the money goes directly to a company overseas. It doesn't even get charged here in New Zealand," she says.

"That company overseas sends money back to the driver here in New Zealand and the overseas company itself shuffles it around overseas, and eventually they pay a marketing fee to the Uber company here in New Zealand.

"All the money kind of floats off overseas, then they just pay a small amount back here."

Dr Russell says lots of companies structure their affairs in this way, but salary and wage earners are stuck paying up.

"If we earn a salary here in New Zealand that gets taxed at source. It's very hard for us to get away from paying taxes. You and I will end up paying something like 20 or 25 percent of our income as tax, while Uber's paying just 1 percent. It does seem really unfair."

If Uber's going to pay its fair share, Dr Russell says we will need an overhaul of our tax laws.

"We're going to have to find a new way of taxing them if we want to get at it."

Newshub.

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