Labour would crack down on those 'ducking their tax obligation' and plans to collect $600 million if elected

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NZN

Multinational companies operating in New Zealand have been warned a Labour-led government will crack down on those that aren't paying their fair share of tax.

The IRD estimates New Zealanders are missing out on hundreds of millions of dollars in tax each year.
Source: 1 NEWS

Labour leader Andrew Little says they should be paying more and his party is budgeting to collect an additional $600 million over three years.

He says he's written to the largest multinationals warning them of his intentions, and today he released the text of his letter without revealing the names of the companies.

"New Zealanders are missing out by hundreds of millions, according to the IRD, because multinational companies can hide their profits in complicated international schemes," Mr Little said in a statement.

"The fact is, many multinationals are ducking their tax obligation and leaving it to Kiwi taxpayers to foot the bill.

"This is simply not fair at a time when we need to urgently invest in hospitals, schools and housing."

Mr Little said if multinationals weren't prepared to pay their fair share, Labour would introduce a diverted profits tax which would enable New Zealand tax authorities to impose tax at a penalty rate if they believed tax had been deliberately avoided.

IRD would be given $30 million a year to do the job.

"A diverted profits tax is an important tool to encourage multinationals to behave appropriately and pay their fair share of tax," he said.

"The experience in the United Kingdom has been positive."

In his letter to the companies, Mr Little tells them: "The next Labour-led government will welcome all international investment that genuinely creates jobs and wealth, but we will not support exploitative investment such as property speculation or companies that shirk their responsibilities to contribute to the cost of a decent society."

The Government is involved in international discussions aimed at dealing with the multinational tax issue.

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