Wednesday, December 14, 2016

National finally pretends to act

The Herald reports that the government is finally going to take some action against multinational tax-cheats:

The Government is planning unilateral action to crack down on tax dodging by multinational companies, including changing the law, amid growing concern about fairness.


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.

"If we continue to get aggressive tax planning and tax arbitrage I won't rule out - I wouldn't call it the nuclear option, but the stronger option - a diverted profits tax," Woodhouse said.

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.