Little says Labour would target $600M in unpaid taxes from multinationals
July 18 (BusinessDesk) - The Labour Party would target multinationals operating in New Zealand to ensure they don't avoid paying tax if it wins power and is targeting $600 million over three years through a "diverted profits tax," says leader Andrew Little.
A Labour government would increase funding to Inland Revenue to chase unpaid taxes and give it the power to impose tax "at a penalty rate if they believe that tax has been deliberately avoided," he said.
“Even on current tax settings, multinationals should be paying more. Labour is budgeting to collect an additional $600 million over three years. We will resource IRD’s investigations unit to do their job properly with an additional $30 million injection each year, Little said in a statement.
He said the UK has had a positive experience adopting such measures and companies such as Amazon were now booking their profits in the UK rather than in jurisdictions with lower tax requirements.
Little also released an open letter written to multinational companies in which he invites them to a round-table meeting immediately after the Sept. 23 election, assuming Labour wins power.
"I intend to address the rising discontent among New Zealanders regarding multinational companies not contributing fairly," he says in the letter. "I invite you to attend this meeting and work together to ensure New Zealand is a fair place to operate and a great place to live. I look forward to discussing this with you further."
“A diverted profits tax is an important tool to encourage multinationals to behave appropriately and pay their fair share of tax like every New Zealander who works for a living," he said. "They don’t have tricky accountants to help them dodge their obligations."