New Zealand to hit online giants with digital tax

The proposed DST would tax multinational companies at about 2% - 3% on the revenue they generate in the country

Photo: EPA Prime Minister of New Zealand, Jacinda Ardern.

New Zealand said on Monday that it plans to update its laws so it can tax revenue earned by multinational digital firms such as Google, Facebook and Amazon, extending a global effort to bring global tech giants into the tax net. According to Prime Minister Jacinda Ardern the cabinet had agreed to issue a discussion document about how to update the country’s tax framework to ensure multinational companies pay their fair share.

“Our current tax system is not fair in the way it treats individual tax payers, and how it treats multinationals,” Ardern told reporters at her weekly post-cabinet news conference, adding that officials will now finalise the New Zealand discussion document on the matter, which is likely to be publicly released by May 2019.

Highly digitalised companies, such as those offering social media networks, trading platforms, and online advertising, currently earn a significant income from New Zealand consumers without being liable for income tax, the government said in a statement released after the announcement. And the revenue estimate for a digital services tax is between NZ$30m and NZ$80m.

Digital services taxes (DST) are generally charged at a flat rate of two to three percent on the gross revenue earned by a multinational company in that country. A number of countries including the UK, Spain, Italy, France, Austria and India have already enacted or announced plans for a DST. The EU and Australia are also consulting on a DST.

Similar articles

  • Covid-19 immunity may be more widespread than tests suggest

    Covid-19 immunity may be more widespread than tests suggest

    People testing negative for coronavirus antibodies may still have some immunity, according to a Karolinksa Institute study cited by the BBC. For every person testing positive for antibodies, two were found to have specific T-cells which identify and destroy infected cells. This was seen even in people who had mild or symptomless cases of Covid-19.

    23
  • UN calls for $10bn aid for Syrians at virtual donor meeting

    UN calls for $10bn aid for Syrians at virtual donor meeting

    Governments are set to pledge billions of dollars in aid for Syrians at a virtual conference on Tuesday to help refugees enduring Syria's ninth year of armed conflict, as the coronavirus and high food prices worsen the plight of millions. European Union leads meeting of 60 governments, NGOs as UN seeks billions for Syrians and countries hosting refugees.

    25