News that the Government has secretly caved in to the demands of multi-national tax avoiders come as no surprise, but will disappoint Kiwi taxpayers, says Labour’s spokesman for Revenue Michael Wood.
“It has been revealed that a United States lobby group, the Digital Economy Group piled the pressure on the Government in a secretive submissions process, to water down proposals to stop ‘profit shifting’, one of the key methods of multi-national tax avoidance.
“The Digital Economy Group refuses to reveal who its clients are but the Guardian newspaper believes they include multi-national tech companies such as Apple, Google, and Amazon.
“Last month when the government threw an unprecedented blanket of secrecy over the submissions process I warned that: ‘It creates a concern that those with vested interests in the policy under consideration are being protected. Especially in an area like multi-national taxation, I would have thought the Government would have wanted to be more open.’
“It now appears that this is exactly what has happened. After trying to talk tough on multi-national tax avoidance, the Government has relented on the original proposals to bring multi nationals with global turnover of $1.2 billion and who have a sales presence in New Zealand, into the tax loop.
“This change happened after the Digital Economy Group submitted in secret and ridiculously claimed that the proposed rules were ‘extreme’. Had the submission been made public there could have been public scrutiny of these claims and exposure of the vested interests at work. This secretive cave-in is a complete disgrace at the tail end of a Government that has allowed multi-national tax avoidance to thrive.
“We must have a robust tax system where you can’t escape paying your fair share simply because you are big and you have a powerful lobby. Labour will make multi-nationals pay their fair share so that Kiwi taxpayers don’t have to shoulder the burden of $300 million of avoided tax every year,” says Michael Wood.