|
Prime Minister Jacinda Ardern said the cabinet had agreed to
issue a discussion document about how to update the country's
tax framework to ensure multinational companies pay their fair
share.
"Our current tax system is not fair in the way it treats
individual tax payers, and how it treats multinationals," Ardern
told reporters at her weekly post-cabinet news conference.
Highly digitalized companies, such as those offering social
media networks, trading platforms, and online advertising,
currently earn a significant income from New Zealand consumers
without being liable for income tax, the government said in a
statement released after the announcement.
The value of cross-border digital services in New Zealand is
estimated to be around NZ$2.7 billion ($1.86 billion).
The revenue estimate for a digital services tax is between NZ$30
million and NZ$80 million, Finance Minister Grant Robertson said
in the statement.
Digital services taxes (DST) are generally charged at a flat
rate of two to three percent on the gross revenue earned by a
multinational company in that country.
A number of countries including the U.K, Spain, Italy, France,
Austria and India have enacted or announced plans for a DST. The
EU and Australia are also consulting on a DST.
Officials will now finalize the New Zealand discussion document
on the matter, which is likely to be publicly released by May
2019.
($1 = 1.4526 New Zealand dollars)
(Reporting by Charlotte Greenfield; Writing by Praveen Menon;
Editing by Kim Coghill)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
