Heather du Plessis-Allan is a columnist for the Herald on Sunday

Heather du Plessis-Allan: Tax for the goose and the gander

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Inland Revenue pursues tradies doing small "cash jobs" but we are turning a blind eye to overseas corporations making laughable tax payments. Photo / Getty Images
Inland Revenue pursues tradies doing small "cash jobs" but we are turning a blind eye to overseas corporations making laughable tax payments. Photo / Getty Images

The plumber is coming around to fix the leaky kitchen sink this week.

I've written him a note.

"DON'T EVEN THINK ABOUT ASKING FOR A CASHIE!"

I hope the capitals make it clear we don't like tax dodgers of his sort.

The only sort of tax dodgers we like are the ones who drive cars as pricey as three-bedroom houses, wear clothing designed by people with Italian names and yet earn a surprisingly low income.

Of course, we now know their pay slips only look so bad because of a complicated scheme involving Panamanians and fake companies in foreign countries.

It's frustratingly ironic that we discover New Zealand helps rich foreigners to dodge tax just as the IRD rolls out the latest radio adverts warning Kiwi tradies against trying to dodge tax.

If ever you needed a truth test on the myth that New Zealand is an egalitarian country, this is it.

We run two tax systems: one for most of us, another for people with money and power.

Most of us have to pay tax.

This Government has made sure even paper boys have to pay tax.

But multinational corporations are too clever to pay much tax. In one year, Facebook in New Zealand paid only $43,000 to the IRD.

An average tertiary-educated couple living in Auckland would pay more between them.

If Facebook, Google, Apple, Pepsi and all their big-name mates paid what some say they should to the IRD, this country would be nearly $500 million richer every year.

But this Government isn't going to make them cough up.

Instead, it's going to make noises about working with the OECD on its top 15 priorities on base erosion and profit sharing, while asking officials to look at bits of paper and figure out whose turn it is to change the toner.

And now this Government isn't going to stop rich foreigners using New Zealand as a tax haven.

Instead, this Government is smiling and waving to tax-dodging celebrities on the other side of the world while it uses the Panama papers leak as some sort of international advert.

But I'll bet the house my kitchen sink is leaking all over that if overseas taxmen are being ripped off by fancy folk hiding their wealth in New Zealand, we are also being ripped off by our own fancy folk hiding their wealth in more exotic locations.

Meanwhile, the IRD is chasing down tradies it reckons may be doing under-the-table jobs worth as much as $20,000.

Let me stop you there, IRD. By my calculations, on a job that size, they'd be dodging tax of around $6000.

It would take 83,000 black-market jobs like that to add up to the kind of tax multinationals are not paying.

So you can either chase 83,000 plumbers, cleaners and freelance photographers, or you can change the rules for 20 big companies.

You know where to find them. Their head office addresses are listed under the "contact us" tab on their websites.

Still, while the heat's on, my plumber will need to be careful.

He would, of course, be absolutely fine if he could propose a complicated asset transfer scheme, in which I put my assets in a Panamanian company he partly owns, allowing him to complete the repairs to "his" kitchen sink, and then permitting him to withdraw a sum from "his" bank account, which we wouldn't have to declare tax on.

But of course he doesn't have the time or the money to set up a scheme like that.

So he'll pay tax.

Debate on this article is now closed.

- Herald on Sunday

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Heather du Plessis-Allan is a columnist for the Herald on Sunday

Heather du Plessis-Allan is a thirty-something trying very hard to avoid growing up. So far it’s working, except for the husband, the mortgage and the proper job. She lives between Auckland and Wellington. When she’s not writing for the Herald on Sunday, she co-hosts TV3’s 7pm current affairs programme Story.

Read more by Heather du Plessis-Allan

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