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Labour threatens Facebook ban over tax issue

Tuesday 28 Jan 2014 3:41 p.m.

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The Labour Party has put forward a possible solution to force multi-national corporations to pay more tax – ban them from the internet.

It says the Government should first talk with companies like Facebook, but if that doesn't work it is important to have a backup, something Labour is describing as a credible threat.

Facebook is the world's largest social network by far, but pays little tax here in New Zealand.

"The Government should always have in its back pocket the ability to ban websites," says Labour revenue spokesman David Clark.

But Finance Minister Bill English says "frankly, that sounds nuts".

"Fine print, he's going to close down Facebook," says Prime Minister John Key. "That'll be interesting."

"Paedophile websites are banned the world around," says Mr Clark.

Facebook is among the multi-national corporations being accused of tax avoidance worldwide. Latest New Zealand figures show it made nearly $790,000 in 2012, but after expenses it was at a loss, so paid just $28,000.

"It's completely unbelievable that they would be making so little profit here," says Mr Clark.

"I think they should pay their fair share," says Mr English.

So consensus is multi-nationals should pay more, but don't agree with shutting down parts of the internet.

"It's just a completely ridiculous idea," says Mr English.

During his interview with 3 News this afternoon Mr Clark began shying away from it too, saying he didn't think it would come down to a ban.

"It's important to have a credible threat, but generally sitting down with them will lead them to review their affairs."

But Labour Party leader David Cunliffe's office isn't ruling it out, telling 3 News Labour is considering a range of options to force companies to pay up - though it's not aware of specific work being done on the internet ban.

3 News

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