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Government remains limp on multinational tax

The Government’s cabinet paper on tax avoidance by multinational companies is a half-pai kick for touch with the election looming, says Labour Finance Spokesperson Grant Robertson.

“The Government is trying to look like it is doing something on multinational tax avoidance, but this paper doesn’t go far enough. This is hardly a legacy for the Inland Revenue Minister to be proud of.

“Other countries around the world, such as Great Britain and Australia, are employing a Diverted Profit Tax (DPT) but National is afraid to touch it. Their own paper fails to make a case for not using a fully-fledged Diverted Profits Tax, so it looks like they are bowing to pressure from multinational companies.

“New Zealand taxpayers will also demand greater clarity about whether or not these proposals will let companies like Google and Facebook off the hook because they don’t have a ‘material physical presence’ in the country.

“National seems to have forgotten that its former leader John Key said ‘We expect a New Zealand company to pay its fair share of tax, we expect a New Zealand citizen to pay their fair share of tax, should we expect a multinational to play by different rules?’

“It’s good to see some proposals for tightening of the rules around multinationals paying tax. This is something Labour has been strongly calling for. But, the Government is dragging its feet and pushing any real resolution of this issue past the election to get it off political agenda.

“The IRD paper calls for a system that has “predictability and fairness” for multinationals. Under Labour-led government, we would deliver a tax system that is “predictable and fair” for all New Zealanders, not just multinationals,” says Grant Robertson.