Spurred by my previous post, I've spent the afternoon browsing annual reports of NZSX50 companies. Its been an interesting exercise. And its turned up some shockers:
- Abano Healthcare Group Limited reported a 2010 pretax profit of $81.5 million, but paid only $2.6 million in tax - an effective rate of 3.19%.
- Ryman Healthcare Limited [PDF] reported a 2010 pretax profit of $83.8 million, but paid only $5.4 million in tax - an effective rate of 6.5%
- Infratil [PDF] reported a pretax profit of $106 million, but paid only $11 million in tax - an effective rate of 10.4%
- The NZX [PDF] itself reported $43.4 million in profit, but paid only $4.7 in tax - a rate of 10.9%.
(And that's not even including the worst of them: Goodman Property Trust [PDF] paid only 1.9% tax on its $506 million profit. But they're Australian, so its the Aussie taxpayer they're ripping off, not us).
Given that we had a headline corporate tax rate of 30% last year (dropping to 28% from this year), companies paying less than half that rate deserve intense scrutiny. While I'm sure that everything they are doing is legal, just as everything Barclays Bank is doing in the UK is legal, that does not mean it is moral, or acceptable. I think the average kiwi would be appalled to discover that some of our biggest companies are paying a lower tax rate than the average pensioner. It suggests that these companies are conniving to avoid paying their fair share. And that is something we should not tolerate.