Wait and see, or action on tax rorts?
The Government and Labour have stepped up their competition to convince ordinary taxpayers that they are taking the hardest practical stance on multinational tax avoidance.
Revenue Minister Peter Dunne said he was watching an Australian move that would force big businesses there to make more information about their tax affairs public.
But Labour revenue spokesman David Cunliffe said the Government should take such steps of its own and also order an inquiry into the techniques being used by multinationals to avoid tax.
In December, Dunne ordered Inland Revenue to get behind a drive by the Organisation for Economic Co-operation and Development (OECD) to clamp down on multinational tax avoidance.
The G20-backed initiative followed growing international concern over rorts used by tech firms like Google, Microsoft and Apple to route profits to tax havens.
The OECD's top tax official, Pascal Saint-Amans, said in January that he hoped measures could be put in place to eliminate tax avoidance by multinationals within two years.
Cunliffe said he believed the OECD project would be valuable but the Government needed to look at more measures that might shore up the tax base in the interim. "The essential difference between Labour and National here is National says it needs to wait for the OECD and it would then consider what they come up with.
"The problem is we don't know how long that is going to take and it is subject to an international consensus that has not formed and may not form. With every year that passes potentially hundreds of millions of dollars of tax are lost."
A paper prepared for Dunne by Inland Revenue and made public this month said the Australian Government proposed to force firms with a turnover of more than A$100 million (NZ$122m) to disclose their total income and how much tax they paid.
A Financial Reporting Bill before the New Zealand Parliament would remove an obligation on many overseas-controlled firms to file accounts with the Companies Office that show, among other things, how much local tax they pay.
Inland Revenue said the bill would still force multinationals that booked more than $30m in local revenues through New Zealand subsidiaries to make their accounts public.
Cunliffe said he would like to see more specific measures.
- © Fairfax NZ News