A non-profit group argues the international tax system is unjust and allows multinationals to make unfair profits. Photo: 123RF
The economy missed out on hundreds of millions of dollars in taxes in the past year because of unequal international tax settings, according to a new report.
The global Tax Justice Network's report said multinationals shifted about $2.5 billion earned in New Zealand overseas last year, and in doing so the country missed out on about $270 million in taxes.
The non-profit group argued the international tax system was unjust and allowed multinational concerns to make unfair profits.
The chairperson of Tax Justice Aotearoa, an affiliate of the network, Glenn Barclay, said multinational companies shifted their profits around the world to minimise their tax bills, thereby hoarding unfair profits.
"[In] US dollars $1557 million generated in NZ by multinational companies is shifted off to other countries," he said.
"We lost $US167.6 million in tax revenue that could have been spent on the things we need such as education, health, and infrastructure, as well as responding to climate generated environmental disasters such as Cyclone Gabrielle."
The report demonstrated the losses incurred by lower income countries were proportionately much greater than for higher income countries.
It called for an end to global tax abuse that deprives countries of tax revenue, saying greater transparency was needed on the activities and behaviour of multi-national companies and rich individuals who hid their money offshore in tax havens.
The report recommended a UN tax convention as a basis for an independent body to set standards and rules for global tax policy and law.
"Tax Justice Aotearoa supports these recommendations and calls on the New Zealand government to support the proposal for a UN tax convention, which is due to be voted on in December," Barclay said.
"It is time for the government, whoever wins the election, to take a stand on international tax abuse."