Amongst its lofty goals the Taxpayers Union aims “[t]o lower the tax burden on New Zealanders”. But a recent press release has it being relaxed about existing policy that increases the tax burden of ordinary New Zealanders for the benefit of rich foreign multinational corporations.
The background is in this fascinating article by Matt Nippert which shows that by transfer pricing about $500 million in tax is avoided each year by some large corporations. For instance last year Apple paid tax of $9 million on sales of $732 million. And here was me thinking that it was one of the most profitable and efficient companies in the world.
This avoidance means that local taxpayers have to pay more. That $500 million a year could be channeled into reducing Government debt or even giving local taxpayers a tax cut.
So what does the Taxpayer’s union think?
MEDIA RELEASE: High company tax rate deterring corporate taxpayers – https://t.co/qLnm3mTnu6
— Taxpayers' Union (@TaxpayersUnion) March 17, 2016
Many will be surprised with the low level of company tax some multinationals pay in NZ. The problem is usually the complex transfer pricing laws rather than companies breaking the law. No one can criticise a business for legally minimising its tax liability, but it does demonstrate why New Zealand needs a simpler, lower tax regime to boost employment, competitiveness and make doing business here more attractive.”
The problem is the Government is not enforcing the tax laws properly and if there are loopholes they should be closed. After all the rest of the world is addressing this problem. A real taxpayers union would advocate for local taxpayers and insist on law changes so that this situation was addressed.
If this was my union based on today’s performance I would be asking for my union fees back.