The Herald reports:
Finance Minister Bill English says he wants Google, Apple and Starbucks and other multinationals to pay more tax and hopes the issue will be raised at economic talks this week.
One can want them to do many things, but they’re not going to. Of course they will locate their tax base in a country with a lower company tax rate.
The minister said this morning that getting corporates to pay their fair share of tax required international collaboration.
“We’re very keen to see them pay more tax. The tricky bit is that it requires combined international action,” he told Radio New Zealand’s Morning Report.
“A whole range of countries are going to need to agree on tax rules for companies like Google and Apple and Starbucks and any number of corporates that you can think of.
Yep there is no unilateral solution. But even multinational co-operation has its limits. It takes just one country not to agree, and that is the country where those companies will be established for tax purposes. It will be good if they can get agreement.
Although Google and other companies had local offices in New Zealand, their tax bills were believed to be out of proportion with their reported sales in this country.
That’s because tax is paid on profits, not sales. ‘ll use a good example.
The latest APN financial statement has revenue of $461 million. Their tax was $652,000. Their tax as a percentage of sales was 0.14%. This is clearly out of proportion to their sales, and APN should immediately pay a fairer proportion.
How about a fair “living tax” of 5% on sales? This would mean APN pays tax of $23 million instead of $652,0000 and Fairfax would pay A$100 million instead of zero. Isn’t this the logical outcome of repeated reporting by APN and Fairfax of other companies’ tax bills in relation to their sales instead of their profits?