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Acting PM Peters rebuffs concerns over digital services tax

Friday 12th July 2019

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Acting Prime Minister Winston Peters has dismissed concerns the US could threaten New Zealand with tariffs over proposed taxes for internet companies. 

New Zealand is still developing a digital services tax which could generate $30-to-$80 million from multinationals such as Facebook and Google, who pay very small amounts in this country compared with their total revenue.

Most of the companies affected are US tech firms and the US Trade Representative Robert Lighthzier has said it is investigating such taxes at the direction of President Donald Trump because it unfairly targets American companies, following announcements by the French government of a similar approach to New Zealand's.

Peters told journalists he had not yet received advice on what would occur, should the coalition continue its plan which is currently under consultation. 

“No, it's not on our radar at this time. We don’t deal in hypotheticals, we just deal in facts.” the foreign affairs minister and acting Prime Minister said at a press conference in Auckland with his Australian counterpart in the foreign affairs portfolio, Marise Payne.

Consultation on the tax plan closes on July 18 and follows a conclusion from the Tax Working Group earlier this year that New Zealand should participate in Organisation for Economic Cooperation and Development discussions to reach international agreement on a tax but also have its own developed, given slow progress on the OECD initiative under the multi-country Base Erosion and Profit-Sharing (BEPS) initiative to stem global corporate tax avoidance.

Peters said his meeting with Payne had been a valuable and fruitful discussion of interests to both their countries and security in the region. 

The pair had both spoken at Indonesia’s Pacific Trade and Cultural Exposition at SkyCity earlier this week. 

Payne told media Indonesia hosting a trade show and meeting of more than 20 Pacific officials in Auckland was reflective of changes in the region more broadly. 

“With the modernisation and growth of countries like Indonesia in the region, it is only logical that their engagement and their roles grow with that as well.” 

Since February 2018 the coalition government has been working towards a “Pacific Reset,” a refreshed strategy toward Pacific Island nations, which included an extra allocation of $714 million over four years in foreign aid.              

(BusinessDesk)

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