New Zealand planning new tax for US tech giants

New Zealand's government is considering a plan to tax multinational tech corporations at a higher rate, citing a disparity between the taxes paid by New Zealanders and large corporations such as Facebook and Google.

The Associated Press reports that the plan could tax tech companies 2 to 3 percent on the revenue they generate in the country, which Prime Minister Jacinda Ardern says is necessary to bring fairness to New Zealand's tax code.


“Our current tax system is not fair in the way that it treats individual taxpayers and the way that it treats multinationals,” the prime minister said, according to the AP. “It’s not fair.”

The tax plan could face opposition from the country's conservative party, which according to the AP supports multinational tech corporations paying more in tax but wants to see the increase handled by working with the Organization for Economic Cooperation and Development to find a solution.

New Zealand's plan follows a similar move in South Korea to raise taxes on tech companies, which South Korean lawmakers last year accused of tax avoidance.

"Under the current law, preliminary or ancillary places of business are not regarded as global companies' offices in Korea, and this has played a role in their tax avoidance," Ahn Jeong-sang, a policy adviser to South Korea's majority party, said last year, according to The Korea Times.

"Considering the characteristics of the digital economy, the concept of fixed places of business needs to be expanded so that the government can secure authority to impose taxes on them," he continued.