The National Government has finally recognised that there is something they could be doing to ensure multinational companies like Apple and Google pay their fair share of tax here.
Last year, Apple in New Zealand had revenues of $732 million yet paid only $6.4 million in taxes here. The year before was similar and so was the year before that. Ditto for Google and Facebook.
A week ago, the Prime Minister was still defending the small amount of tax Apple paid here. Revenue Minister, Michael Woodhouse, has also defended his Government’s inaction saying in response to my work and questions in Parliament in March that, “we have a really good tax policy framework” and “this is a global problem that requires a global solution,” and “unilateral measures are not that great when you are negotiating a multilateral package.”
Both the UK and Australia have previously passed new, unilateral laws to crack down on multinational companies avoid paying tax and IRD warned the Government in 2013 about “addressing potential deficiencies in our own rules, which we have concerns about”.
Not only do we need new tax laws to combat multinational tax evasion, we also need to better resource IRD to fight these sophisticated tax avoiders. National’s plan to dramatically cut IRD’s resources in the future looks very short-sighted indeed.