Expert: Plan to tax digital giants a bold move

Author
Newstalk ZB,
Section
Audio,
Publish Date
Tuesday, 19 February 2019, 9:13AM
Facebook and Google are amongst the companies that would be targeted by this new tax. (Photo / Getty)

The Government's proposal to slap a tax on multinational digital companies like Facebook and Google is being seen as a very bold move.

It says progress on the issue with the OECD is too slow, so has started working on an interim tax to be in place by the end of the year.

Auckland University law Professor Craig Elliffe told Mike Hosking lots of jurisdictions are pretty fed up with multi-national companies operating without a tax footprint.

However, he's welcoming the fact it's a discussion document.

"Because international trade is effected by tax policy so I think we have to tread very carefully to make sure that make the right calls." 

Elliffe says there are several important issues to consider, including whether it's better to deal with this at an OECD level.

He says multi-national online companies are already taxed in India and Israel.

"They certainly don't seem to have reacted to India's equalisation levy in any way, and that's been on foot since 2016. I would see that as an unlikely scenario." 

Elliffe says six European countries have also decided to work towards having their own domestic tax rules to cover global internet firms.

Australia has also released a discussion document on the issue.

 

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