Source: PSA
To help ensure properly funded public, health and community services the Government needs to aggressively ensure large international corporations pay their fair share of tax in New Zealand, the PSA says.
A report issued today, commissioned by Tax Justice Aotearoa and the Better Taxes for a Better Future campaign, shows that some of the richest multi-national technology corporations – like Facebook, Microsoft and Amazon Web Services – are paying minimal tax on the billions of revenue they generate in New Zealand. It also highlights how the Government is not taking opportunities to ensure these companies pay more in tax.
“New Zealand is missing out on more than $100 million in tax revenue from multi-national corporations each year that could be used to fund vital public services like hospitals and border security, says Public Service Association Te Pūkenga Here Tikanga Mahi National Secretary Fleur Fitzsimons
“By not enforcing fair taxes for international tech companies the Government is choosing to place an unfair burden on working people to fund public services.
“The recent legislation ending 33 pay equity claims of underpaid, mainly female workers to raise $12 billion in revenue to shore up the Government’s Budget is a dramatic example of how women are being targeted by the Government while large corporates are exempted from paying their fair share,” Fitzsimons says.
“At the same time the Government has chosen to fund $3 billion in tax breaks for landlords and $300 million for tobacco companies, while cutting funding for public, health and community services.
The report Big Tech Little Tax details the ways international tech corporations pay minimal tax on billions of dollars of revenue. They do this by moving the bulk of their revenue to their parent companies in low tax countries, which leaves them little taxable income in New Zealand.
“More importantly the report highlights the opportunity for the Government to take action to increase the tax these companies pay in New Zealand, rather than continually slashing funding for public, health and community services,” Fitzsimons says.
“The Government seems reluctant to tackle taxing the tech corporates, partially out of fear of US retaliation. However, the report identifies other measures the Government could take that are already allowed for in current legislation and international agreements.
“What is needed is the political will to take the fight to these large corporations, which is what is already happening in Australia,” Fitzsimons says.
One initiative identified in the report, which is already allowed in the New Zealand -United States agreement on double taxation is to enforce a 5% withholding tax rate the royalties the tech corporation pay to their parent companies. This move would raise $130 million that could be used to pay for over 10,000 extra elective surgeries each year or build 1,400 social housing units, Fitzsimons says.
The PSA is a member of Tax Justice Aotearoa.
