Opposition politicians are accusing the government of "aiding and abetting" multinational companies which are paying minimal tax in New Zealand.

LISTEN ABOVE: Minister of Revenue Michael Woodhouse talks to Larry Williams

FULL STORY: Top multinational companies pay virtually no tax in NZ

Rachel Smalley: If we pay our tax, so too should the big multinationals

Twenty companies, including tech giants Apple, Facebook, and Google, made $10 billion in sales to Kiwis in the 2014 calendar year, but paid just $1.8 million in income tax.

If the New Zealand branches of the firms reported at the same rate as their parent companies, the tax paid would have been $490 million.

Green Party co-leader James Shaw told Mike Hosking the government hasn't been changing the law when it has the power to do so.

"I think that the government is aiding and abetting this kind of behaviour because it is not changing the law, hasn't been changing the law, and it could have been," Shaw said.

"Australia has put in place a one-hundred-percent tax penalty for companies that they find should have been paying Australian company tax rates."

He said the potential sums involved vastly exceeded other areas of government priority for enforcement and could be put to good use. He stated that $500m, "a boatload of money", could pay for 26,000 hip operations, 4,000 doctors or 7500 police officers.

Shaw is seeking more resources for the IRD to chase the companies shifting profits, and doesn't believe those companies will leave the New Zealand market if targeted.

"It's very bad for their reputation if they say 'Look, we're just going to completely withdraw from the New Zealand market just because we don't want to pay a fair tax rate'," Shaw stated.

Stuart Nash, the Labour Party's revenue spokesperson, pointed out that what these companies are doing is not illegal, but it is highly unethical.

Nash told Rachel Smalley this morning that the problem was worse than a $500 million hole in the tax take, if you look at every company in the country.

"My understanding is that it's at least double that five-hundred-million," he said. "It might be five-hundred-million for the companies you're looking at but as mentioned in the reports I've read, it said between one-billion and seven-billion a year at the extreme," he said.

"It's very easy for these huge companies to undertake very aggressive tax-planning to make sure they don't pay any tax."

"Every country needs to close down these loopholes because the problem is if you just act unilaterally then companies just move their operations."

Adam Hunt, the former IRD senior manager who helped the Herald's investigation told Mike Hosking the way to attack the issue may be to negotiate agreements with the companies involved.

"If you're running one of these firms, you've got to do a good job for your shareholders and I think there's a good argument there saying 'We should only pay the amount of tax due'."

"But if you can bring some social pressure to bear to say this will actually approve our market position, that can go a long way to help."

Hunt also served as the head of strategic intelligence at the Financial Markets Authority and now consults on taxation matters for the International Monetary Fund