If the Government proceeds with its plans to tax digital service providers, there will be hidden costs for Kiwi consumers, says the New Zealand Taxpayers’ Union.
Taxpayers’ Union spokesman Louis Houlbrooke says, “The proposed ‘tech tax’ would make it more costly for foreign firms to offer their services to the Kiwi market, forcing us to wait longer for the likes of Lyft or Amazon TV to start operating here. And if they do decide to offer services in New Zealand, they’ll be hiking the bills on households to compensate for the cost of the tax.”
“Being a small country at the bottom of the world, we should try to be more, not less, attractive for tech companies.”
“Perhaps the worst aspect of this kind of tax is that it applies to sales (i.e. revenue) rather than profit. The proportion of net profit to actual sales can vary enormously, with some companies even operating at a loss for a period of time before becoming profitable. Forcing firms to hand over a proportion of revenue regardless of their profitability could mean the loss of services like Uber.”