Thursday, November 29, 2012

Taking on our local tax cheats

Overseas, governments and media are asking increasingly annoyed questions about tax cheating by multinational companies such as Starbucks, Apple, and Facebook. Now Labour joined the campaign, and has taken up the cry locally:

Facebook New Zealand paid just $14,500 tax - give or take a few dollars - last year, making a mockery of Peter Dunne’s refusal to consider closing tax loopholes for multinationals, says Labour’s Revenue spokesperson David Clark.

“The New Zealand arm of the world’s most used online search tool, Facebook, paid only $14,497 in tax last year.

“In 2010 its tax bill was a mere $5,238. For a company that has 2.2 million users in New Zealand and makes billions worldwide, that’s barely believable.

“It appears Facebook is using the ‘double Irish’ tax technique. That’s where it uses Irish Facebook, which pays just 12.5% tax, to determine revenue and expenses. This ensures the company can put most of its revenue through countries with low-tax systems.

“Peter Dunne calls that ‘legitimate tax avoidance’. I call it a rort.

Clark is right - it is a rort. And it is not one we should accept. Across the Tasman, the Australian government is planning to close the loophole which allows these companies to export these profits tax-free. But Peter Dunne has no plans for us to follow suit, and his past public statements suggest he supports tax evasion.

Tax cheats steal from us all. Every dollar they save in tax from these tricks is a dollar we have to pay, borrow, or cut - a dollar we don't get to spend on schools, hospitals and state houses. The government should make these companies pay their fair share. And if the present government refuses to do so, because they are on the side of the tax cheats, we should elect one that will.