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Big, foreign-owned multinational companies are not paying their fair share of tax here in New Zealand and National is doing little to stop it.
Analysis by the New Zealand Herald shows foreign multinationals could have avoided paying up to $500 million in tax in New Zealand last year. That’s enough tax to fund the salaries of 9,259 nurses, 7,601 police officers, or 10,498 primary school teachers.
“These foreign multinationals benefit from our collective investment in medicines, schools, hospitals, and the police, but are not paying their fair share of taxes to fund them.”
Green Party Co-leader James Shaw.
Both the UK and Australia have recently passed new laws to stop multinational companies artificially shifting their profits to low tax countries to avoid paying tax. While the Government might claim they are working multilaterally with the OECD to address this tax rort the OECD has been trying to address this issue since 1979. We can’t afford to wait another year to close this massive multinational tax loophole.
Australia and the UK have shown you don't have to wait and we can move forward with law changes here that are in harmony with the direction international efforts are moving. The IRD will also need increased funding to fight these big corporations who are among the most sophisticated tax avoiders in the world. Companies like Apple have yearly revenues bigger than the entire New Zealand economy.
The National Government could have returned to surplus a year earlier if it’d gotten as tough on foreign multinationals as it has on welfare rules and enforcement.
For more information:
Find out how little tax multi nationals pay compared to you!Invalid income - just use numbers
Disclaimer: Note the Company tax rate in New Zealand is 28% so the fair share that these companies should be paying will but even higher - unless you earn over about $180,000 in which case your effective tax rate will be higher than the company tax rate.
Figures calculated by working out the difference in effective tax rates face by an individual and the relevant corporation, based on data reported by Matt Nippert in the NZ Herald.