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Ban tax avoiding Facebook? Yeah, right

29 Jan 2014

"Fine print, he's going to close down Facebook. That'll be interesting."

Prime Minister John Key’s scathing put down of Labour’s possible plans to ban tax avoiding multinational corporations from the internet has caused a stir in New Zealand politics.

For the opposition has suggested a potential solution to the growing list of companies paying minuscule tax rates in the country - threatening them with serious sanctions.

"The Government should always have in its back pocket the ability to ban websites," says David Clark, Labour revenue spokesman David Clark.

"It's important to have a credible threat, but generally sitting down with them will lead them to review their affairs."

Facebook, who paid a measly $28,000 in tax during 2012, is not alone in avoiding the tax man, with fellow tech giants Apple and Google also coming under scrutiny Down Under.

Yet despite the general acceptance that more needs to be done, Finance Minister Bill English echoed Key’s comments, claiming the idea “frankly, sounds nuts.”

"It's just a completely ridiculous idea," English adds.

Labour’s potential stance follows news, reported by Techday.com, that the government has called on the tech giants to pay more tax.

Insisting the organisations should cough up their fair share, English acknowledged the companies should pay more last week, but warned achieving such government goals was easier said than done.

“We’re very keen to see them pay more tax,” English told Radio New Zealand’s Morning Report last week. “The tricky bit is that it requires combined international action.

“A whole range of countries are going to need to agree on tax rules for companies like Google and Apple and Starbucks and any number of corporates that you can think of.

“I would certainly hope that’s going to be discussed at this forum because it’s going to need a lot of people including businesses to see that it’s unacceptable.”

Should global firms pay more tax?