The Council of Trade Unions is calling for greater transparency on how much tax large firms pay in New Zealand. CTU Economist Bill Rosenberg and Secretary Sam Huggard told the Finance and Expenditure Select Committee that the Taxation (Neutralising Base Erosion and Profit Shifting Bill) was a step in the right direction.
“This bill is a good start, but we think we need to go further – in particular in addressing tax avoidance from the likes of Google and others without a taxable presence in New Zealand,” Mr Huggard said today.
“Google announced last week they are moving to record local revenue as earned in New Zealand, rather than Singapore, in part in response to this bill. While that’s good for Google, a weak system of voluntary moral compliance isn’t enough – we need much stronger laws to protect our tax base.”
“When we have weaker tax laws than other jurisdictions, working people need to pay for the lost public funds flowing offshore as untaxed corporate profit. And when those lost corporate taxes build up over years and years, our schools, hospitals and other public services working people rely on suffer.”
“We know that countries around the OECD have already done much more than us to stop being seen as a light touch for corporate tax evasion, and New Zealand has a long way to go.”
“In Australia for example, since 2013 they have published the income and tax paid by large companies operating there, so citizens can have more confidence they are not being ripped off by those companies using tax loopholes. We see no reason such a register couldn’t be published in New Zealand, especially with companies operating here like Exxonmobil, who booked $2.8 billion in local revenue but somehow got a $14 million tax credit. [1] Just 103 companies operating in New Zealand make up 30% of our GDP, [2] and we need to know they are contributing their fair share in return for the profits they make off Kiwis.”
“We all pay tax to support quality, sustainable public services that New Zealanders use. Just because the head honchos of big companies might be based offshore doesn’t mean they should be exempt from contributing. Their profits are built on our infrastructure, environment, and people. We say sunlight is the best disinfectant- so if they have nothing to fear from a corporate tax register, they should have nothing to hide.”
[1] http://insights.nzherald.co.nz/article/nz-multinational-tax-gap/ [2] Same source