A newspaper that pays no tax complains about tax avoidance!

The Dom Post editorial:

Taxes are what we pay for a civilised society, according to the great American Supreme Court judge Oliver Wendell Holmes.

If that is so, then aggressive tax avoidance is an offence against civilisation.

I’d love to know what the Dom Post defines as aggressive tax avoidance. I presume it means tax avoidance done by other companies, but not by ourselves.

Google, for instance, whose slogan used to be “Don’t be evil”, in 2012 paid a mere $165,000 in tax in New Zealand. Amazon paid $1.6m tax on sales of $46.5m. And Apple paid $2.5m on sales of $571m. Does anyone think these companies are paying their fair share?

I’ve got a much better example. Fairfax Australia (owns the Dom Post) paid no tax at all last year on revenue of A$2.01 billion. That’s outrageous I’m sure the Dom Post agrees, and I look forward to them joining with the NZ Herald to campaign on their owners paying more tax. The fact it means they may have to sack a few editorial staff to afford their increased tax bills I’m sure is not what is preventing them from not being total hypocrites.

Or maybe the Dom Post will say you can’t compare them to Google and Apple because tax is paid on profits, not revenue. Well yes they are, so why the hell did the editorial not mention that actual profits made by Google and Apple in New Zealand? They made a conscious decision not to tell their readers that essential piece of information.

For the record I’m all for the IRD taking court action against tax avoidance that is artificial, as defined in the Tax Act. They do this on a regular basis. For example, they are battling APN (NZ Herald) for $48 million.

Some will argue that companies are entitled to minimise their taxes. Tax avoidance, after all, is legal, unlike tax evasion. Some even say that companies owe their loyalty only to shareholders, not the taxpayer, the government or their fellow citizens.

This is plainly wrong. Taxes provide the schools, hospitals, infrastructure and social services on which we all depend. Corporations benefit directly from state-funded education, research, roads, courts and public health programmes. So they should contribute to “the cost of civilisation”.

I agree people should pay their taxes. Fairfax has paid no income tax in the last year. This means they are not contributing to the cost of civilisation. According to their editorial it doesn’t matter what their taxable profit is, as that may have been minimised by accountants. Amazon paid tax equal to 3% of their revenue. As the Dom Post seems to think you should pay tax on revenue, I think Fairfax should pay A$60 million immediately as their contribution to the cost of civilisation.