Clayton Mitchell New Zealand First MP

Last week saw the Base Erosion and Profit Shifting (BEPS) Legislation move a step closer to being implemented, with the Committee of the Whole House stage passing unopposed.

What this very important new law will do is ensure all multi-national organisations that are using New Zealand as a trading post, pay their fair share of tax.

Many of these international companies use loop-holes in the law to minimise and, in many cases, remove themselves from paying tax in New Zealand.

This is a very serious and real problem for two reasons. The first is a loss of revenue potential for the government, which is then passed onto New Zealand tax payers to make up the difference.

This loss in revenue potential is estimated conservatively at $275 million per annum, but some economists believe it is a much higher amount and runs into the billions.

With the country currently needing some serious investment into infrastructure and services, this revenue deficit (particularly in the transport sector) is passed onto Kiwis to make up the shortfall.

The second serious issue arising from multi-nationals not paying their fair share of tax hits Kiwi companies not on a level playing field with our international counterparts.

Not paying tax gives a huge advantage to overseas companies, enabling them to spend more money on research and development, marketing, systems, procedures and human resourcing, which disenfranchises New Zealand-owned companies and has a direct impact on their volumes and profitability.

New Zealand First and this coalition government are prioritising this new law to get it implemented as soon as practically possible for the benefit of all New Zealanders and New Zealand companies.