Labour to crack down on multinational companies
Multinational companies operating in New Zealand have been warned a Labour-led government will crack down on those that aren't paying their fair share of tax.
Labour leader Andrew Little says they should be paying more and his party is budgeting to collect an additional $600 million over three years.
Mr Little told Newshub on Tuesday he has written to "about 60" multinational companies in an effort to get them to pay their fair share of tax.
The text of his letter was released on Tuesday without the names of the companies revealed, but he said the list includes some of the largest multinational companies.
"New Zealanders are missing out by hundreds of millions, according to the IRD, because multinational companies can hide their profits in complicated international schemes," Mr Little said in a statement.
"The fact is, many multinationals are ducking their tax obligation and leaving it to Kiwi taxpayers to foot the bill.
"This is simply not fair at a time when we need to urgently invest in hospitals, schools and housing."
He told The AM Show that Treasury estimated roughly $300m year in tax goes uncollected from multinationals, and there were estimates of up to $1 billion.
"The Government has said they are going to plan to collect $100 million of it. I'm saying; go for the whole $300 million."
If multinationals weren't prepared to pay their fair share, he said, Labour would introduce a diverted profits tax which would enable New Zealand tax authorities to impose tax at a penalty rate if they believed tax had been deliberately avoided.
IRD would be given $30 million a year to do the job.
He said while it may not be easy, introducing a diverted profits tax as seen in the UK and Australia will generate dividends.
"Even just by enacting the law, they immediately got multinationals to start paying tax," he said.
"There was all this fear-mongering about whether they're gonna leave [but] they didn't. They wanted to be there. They want to be in good, stable economies [and] democracies.
"They'll stay here, but we need to get them to pay their way."
In his letter to the companies, Mr Little told them "the next Labour-led government will welcome all international investment that genuinely creates jobs and wealth, but we will not support exploitative investment such as property speculation or companies that shirk their responsibilities to contribute to the cost of a decent society."
The government is involved in international discussions aimed at dealing with the multinational tax issue.
Newshub / NZN