Steady as she goes on tax rorts

The Government is likely to stick with the approach National was taking to crack down on multinational tax rorts, Revenue Minister Stuart Nash has signalled.

Nash also indicated the new Government would not pressure the Inland Revenue Department to answer more questions about companies’ tax practices, despite appearing to call for more transparency prior to the election.

Finance Minister Grant Robertson appeared to query whether the former Government was doing enough to clamp down on tax rorts in July, saying it was ‘‘a joke that the Government itself has estimated that multinationals are avoiding $300 million of tax per year, but is only budgeting on its policies recouping $100m of that’’.

The National-led Government then upped its estimate of the extra tax its proposed new measures would bring in to $200m a year.

Those measures – some details of which have yet to be finalised – are technical in nature.

They are designed to stop foreign firms reducing the profits of their New Zealand subsidiaries by charging them excessive interest or inflated fees for head-office services, or using ‘‘artificial arrangements’’ to avoid having a taxable presence in the country.

Other changes proposed by the previous Government would also make it easier for Inland Revenue to investigate ‘‘unco-operative’’ multinational companies.

Nash said he did not see ‘‘a significant variation in approach’’ from the new Government.

‘‘The immediate priority is advancing the … work already under way. These changes have been forecast to increase revenue by approximately $200m per year.’’

However, the Government was considering providing increased funding to Inland Revenue to ensure companies were abiding by the rules, he said.