Labour risking punitive tariffs for Google tax

The Herald reports:

New Zealand exporters could face nearly $100 million in tariffs if the Government forges ahead with its Digital Services Tax (DST).

Often dubbed a “Google Tax”, a DST targets large offshore tech companies whose complex tax arrangements often mean they pay little tax in jurisdictions like New Zealand.

The Government is part of an OECD process to create a global framework for taxing the these tech giants fairly, but has reserved the right to implement a DST if those international efforts fall through. A DST has been on the agenda since at least 2019.

Last Thursday, the last sitting day of Parliament, it pulled the trigger, introducing legislation that would levy a 3 per cent tax on the revenue of firms that make over €750 million ($1.373 billion) a year from global digital services and over $3.5m a year from digital services provided to New Zealand users.

A unilateral tax on revenue instead of profit is unfair and should not be done. We should work through the OECD process rather than do an unprincipled unilateral tax