New Zealand plans new tax for giants like Google, Facebook
New Zealand’s government announced plans on Monday for a new tax targeting online giants like Google and Facebook that earn plenty of money in the country but pay little tax.
Prime Minister Jacinda Ardern said there’s a gap that needs to be closed.
“Our current tax system is not fair in the way that it treats individual taxpayers and the way that it treats multinationals,” she said. “It’s not fair.”
She said the proposed digital services tax would tax multinational online companies at about 2 or 3 percent on the revenue they generate in New Zealand, a rate that is in line with other countries considering similar taxes.
Revenue Minister Stuart Nash said foreign online companies have a competitive advantage over local companies that do pay significant amounts of tax. He said the new tax could be implemented next year.
Nash said New Zealand would continue working with the Organization for Economic Cooperation and Development, or OECD, to find an international solution to the problems of taxing big online companies, but that New Zealand was not going to wait around.
“The OECD can move at a rather slow rate,” he said.
New Zealand’s government estimates that online multinationals do about 2.7 billion New Zealand dollars ($1.9 billion) worth of business in the country each year, and that the new tax could generate up to 80 million New Zealand dollars ($55 million) annually. (AP)