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Government’s Johnny-come-lately approach to multinational tax won’t wash

It’s a case of baby steps for a Government that still allows multinational companies to avoid paying their fair share of tax, says Labour’s Revenue spokesperson Michael Wood.

“After nine years in government, five years after the issue of multinational tax avoidance was placed on the IRD’s work programme, and two weeks after Labour’s own detailed proposal was released, the Government is to be congratulated on their relatively quick response.

“It’s good to know that things can be achieved with an election looming.

“However, the changes announced today continue the same sluggish vein of Government inaction, still selling New Zealand taxpayers and companies short by $100 million a year.

“Under the Government’s own estimates, multinationals are avoiding $300 million of tax per year, yet the changes today would only recoup $200 million of that each year.

“Labour’s plan will deliver the missing $300 million to New Zealand coffers and provide a fairer deal for New Zealand companies who can’t hide behind complicated tax structures offshore. It’s also better for multinational companies that already pay their fair share.

“We will resource IRD’s investigations unit to do their job properly with an additional $30m injection each year. This is in rather stark contrast to the Government, which has recently announced 1500 job losses at the IRD.

“The Government’s response remains unfair to all New Zealand taxpayers and the multinationals that pay their fair share, and the response is years overdue. You’ve got to question National’s credibility on this issue and ask whose interests they are serving.

“Labour puts the interests of New Zealanders first. Labour’s detailed plan will give the IRD the resources they need to ensure multinationals pay their fair share,” says Michael Wood.