Barry Soper: We might pay for a tax on internet giants

Barry Soper,
Publish Date
Tuesday, 19 February 2019, 7:47AM
Prime Minister Jacinda Ardern.
Prime Minister Jacinda Ardern.


Jacinda Ardern repeated the line a few times when talking to journos after yesterday's Cabinet meeting.

Our current tax system is not fair, she said, in the way it treats taxpayers and the way it treats multinationals.

Ardern's dang right about that, particularly when it comes to those entities who're coining it on the internet, selling ads and the like across their platforms but paying zilch in tax.

They're going to be made to pay their "fair share" of tax, she and her Revenue Minister Stuart Nash declared.

Really, when our companies are paying 28 per cent and most of us are copping 30 to 33 per cent, with a pile-on of 15 per cent on GST every time we part with our hard-earned dosh, the fair share for the internet giants, the likes of Google and Facebook, and the smaller players like Airbnb and Uber would be more like a fairy share.

The Beehive boffins would argue the tax won't apply to profit but to revenue, but at the two to three per cent they're thinking of, it would be a drop in the bucket for the big players and wouldn't cause so much as a ripple in the mountain of tax they take off us.

The thinking is it'll bring in between $30-$80 million, on around $2.7 billion, which would go nowhere near paying for what the Government's coughing up to bring Māori land up to scratch for example.

And unfortunately the trouble with consumer taxes, which is what this would be by another name, is that the punter ends up paying.

This was another example of the Government making announcement when in reality there really wasn't one to make.

He'd asked his officials to have a look at this digital services tax, saying they'd be working closely with the OECD to get a blanket, across the board tax.

But like all cumbersome international organisations it's lumbering along while nations like the United Kingdom and India have led the way, leaving us to play catch up.

There's a danger for a small, vulnerable economy like ours, which we're finding out with the Chinese.

And some concern has been expressed by those who know much more about the intricacies of the tax system, that there could be a backlash for our exporters who could face the prospect of a tax on our exports if we're out on our own.

Still we've got time on our hands, with a discussion document not expected to be released in May.

In the meantime, enjoy the cheap, Uber ride while you can get it.

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