Herald’s tax-dodging hypocrisy continues today


The Herald continues its campaign against tax dodgers today, ignoring their own issues with IRD.

The thing is, the Herald has actually dodged tax; the corporates they are railing against haven’t broken any laws or rules.

It’s become increasingly clear that multinationals are not paying much tax in New Zealand. They’re shifting profits around the world through charging internal fees and royalties, and increasing the “cost” of products sold from one part of a company to another, and through various other tax practices.

The mechanisms they use enable them to locate profits in jurisdictions with very low corporate tax rates. It’s a simple thing to do, even when there are robust anti-avoidance laws.

While New Zealand doesn’t have a very high company tax rate, neither does it have a very low company tax rate. So multinationals earning significant revenues here can find it advantageous to shift their profits to countries with much lower tax rates.

Or, in the the case of?the NZ Herald, just not pay $64 million in tax.

If you think, as some people do, that all taxation is theft, you might not be troubled by this. On the other hand, if you think taxation is the price of civilisation, then what the multinationals are doing is taking us for a ride.

Just like the NZ Herald. Classic “do as I say not as I do” attitude. You would think the newspaper of record would get its house in order before pointing the finger at other foreign-owned companies.

The law at present permits multinationals to minimise their tax. While they might be engaged in unfair practices, they’re not doing anything illegal. If a government wants to collect more in taxes from them, it can change the law. This ensures governments’ tax-collecting activities are exposed to the full scrutiny of our democratic processes.

Or, in?the?case of the NZ Herald, multinationals just skip out on paying their $64 million in taxes altogether.

Multinationals are of course objecting, saying they already make a contribution to the price of civilisation in New Zealand by paying GST and PAYE on their employees’ wages. That is misleading. While companies bear some of the cost of GST, ultimately the full cost of GST is borne by end users. That’s the ordinary citizens of New Zealand, you and me, the consumers purchasing goods and services. By and large, companies act as tax collectors for GST, but they don’t by any means bear the full cost themselves.

APN, the Herald’s owner, didn’t object at all, they simply didn’t pay their tax. Imagine how many cancer patients could get the medicines they need if the Herald paid their taxes. That $64 million would go a long way to funding Keytruda.

As for PAYE on their employees’ wages, again, that’s not the company paying tax. It’s the employee paying tax. All the company is doing is collecting the tax on behalf of government. This imposes a cost on companies, but they can claim a tax deduction for it.

Matt McCarten knows all about that…perhaps he is the one advising Labour and Little to go after tax dodgers…except Matt McCarten though…he’s exempt.

So these big international companies are engaging in some fairly interesting tax minimisation activities, and they’re trying to claim some kind of social credit for their employees’ taxes too. “We’re good citizens because our employees pay tax.”

I think the Herald’s own tax arrangements are more than fairly interesting…they are illegal.

Surely Matt Nippert is doing a deep investigation into APN’s tax plans.


– NZ Herald