Back in 2013 Labour was arguing that multinational companies should pay their fare share of tax. Then revenue spokesman David Cunliffe wrote:
We all must pay tax – including multinationals
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Let me put on record that Labour is not proposing new taxes in this area – we are researching and consulting on a widely recognised challenge: how to protect the tax base, improve transparency and reduce legal avoidance of existing tax obligations by global companies operating within New Zealand.
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Our tax system must be fair to all – and that includes multinationals paying their fair share. Because in the end somebody has to pay.
Such mad ideas as asking Apple to pay its taxes were of course ridiculed by The Herald who couldn’t see any value in it, and mocked by National’s pet blogger. As late as March this year National were still dismissing the idea out of hand.
How times change.
Due in part to the excellent work of Matt Nippert at the very same Herald, National have been shamed in to action at last:
Government planning action to target multinationals over tax
The Government is planning unilateral action to crack down on tax dodging by multinational companies, including changing the law, amid growing concern about fairness.
Revenue Minister Michael Woodhouse said proposals outlined in a cabinet discussion document tabled last month would see Inland Revenue properly armed to tackle the problem and could be accompanied by increased enforcement funding for the taxation authority.
(The very same Woodhouse that was so dismissive in March.)
The proposals include granting broader information-gathering powers to Inland Revenue investigators, shifting the burden of proof to multinational companies in disputes over transfer pricing, and tightening loopholes that allow companies to claim they have no taxable presence in New Zealand.
The moves stop short of a full-scale diverted profits tax, as introduced by Australia and the United Kingdom, but Woodhouse refused to rule out such a measure if this new package failed to achieve results.
It’s a good start. But it’s not yet enough:
‘Not far enough’ – Opposition on tax crack down
Opposition parties have welcomed government moves to crack down on tax avoidance by multinational companies, but tempered this support with criticism they come too late and do not go far enough.
The Herald this morning reported a cabinet discussion paper showed an about-face in government policy with plans having been drawn up to unilaterally toughen our tax regime to clamp down on tax leaking offshore.
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Both the Labour and the Green parties this morning said they supported the proposed measures, but also pressed for even more action – including lobbying for a diverted profits tax that Michael Woodhouse said would only be implemented if this new policy package failed to deliver results.Labour Party finance spokesman Grant Robertson said the cabinet discussion document was thin on detail and failed to adequately explain why a diverted profits tax had been taken off the table. …
I/S at No Right Turn writes that the Nats are only pretending to act:
Any action is better than none, but given that other countries have already implemented a diverted profits tax, everyone is already asking why National isn’t planning to as well. And the natural suspicion is that, as with everything else, they’re trying to do as little as possible: enough to get the headline “National cracks down on tax-cheats”, but not enough to actually hurt them and dry up the donations.
But again, its a useful peg in the ground, and allows the left-wing parties far greater room to move. National now openly supports targeting tax-cheats. Which means that Labour and the Greens can give us the real action we need.
Seems like a fair summary.
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