The Government’s proposals to crack down on multinational tax avoidance, by its own admission only recovering one third of the missing money, means hardworking Kiwis will bear more of the tax burden, says Labour’s Revenue spokesperson Michael Wood.
“The Government says there is a $300m shortfall but by its own admission in Budget documents is only planning to collect $100m of it. This is unambitious at the very least, and a double-standard that will cost Kiwi taxpayers.
“It has been revealed in Budget Estimates hearings this week that the Government will use the new IRD system to collect $2.9 billion more tax from New Zealanders over the next eight years, around $360m per year.
“If it’s good enough for government to push hard working Kiwis to pay every last dollar of tax they owe, why not multi-nationals?
“This issue isn’t new: Since 2012 the Government has known multinational companies were proportionately paying far less tax than the average Kiwi worker, but National has slowed the pace of tax reform to a crawl.
“Rather than leading the world in ensuring that multinational companies pay their fair share, Ministers have been increasingly keen to hide behind international frameworks like the OECD BEPS (Base Erosion and Profit Shifting) process.
“Meanwhile, countries such as the UK and Australia have delivered unilateral changes to their tax regimes to help reduce tax avoidance.
“Kiwi workers and small New Zealand enterprises are picking up the tab for some of the largest companies in the world, while these companies enjoy an unfair advantage in the market. Everyone is worse off because of avoidance except those small number of companies.
“It’s time for a fresh approach. A Labour-led Government will establish a new Tax Working Group of experts to examine how best to deliver tax changes that are positive for the economy and New Zealand taxpayers.
“We’ll provide a better balance in our tax system to support the productive sector and to ensure that all taxpayers are paying their fair share,” says Michael Wood.