More calls for multinationals to pay up

  • 18/03/2016

There are renewed calls for the Government to crack down on multinational companies avoiding paying their fair share of tax in New Zealand.

It's well known some of the world's most recognisable businesses, including Facebook, Google and Pfizer pay little to no income tax, despite their huge sales in New Zealand.

The companies maintain they're fulfilling their legal obligations, but there have been growing calls in recent years for the government to step in and do something about it.

A New Zealand Herald analysis found that had the New Zealand-based subsidiaries of 20 multinational firms reported profits at the same rate as their parent companies, their combined income tax bill would be nearly $490 million.

Instead they paid just $1.8m.

Labour's finance spokesman Grant Robertson wants New Zealand to follow Britain and Australia's lead and hold an inquiry into the issue.

"The public must have confidence the tax system isn't being treated with contempt. This is a situation where action is needed at both national and international level," he said.

"There's a fundamental issue here. Every person and business that earns money here should pay their fair share of tax. If a salary worker pays their full tax, so should an international company."

Green Party co-leader James Shaw says while it's good the government has been working with the OECD on measures to address tax avoidance, it needs to take action now.

"We can't afford to wait another year to close this massive multinational tax loophole," he said.

In October the OECD unveiled its proposed package of measures to help governments plug gaps in international rules that it said "allow corporate profits to disappear or be artificially shifted to low/no tax environments, where little or no economic activity takes place".

At the time, then-Revenue Minister Todd McClay said no decisions had been made by New Zealand on implementation or timing and any changes would be subject to public consultation.