The Herald (I know, I got roped in) has an article from Spark’s CEO. Forgetting my broader opinions about the subject matter, this statement really got up my nose:
‘And not only that, cause New Zealanders to pay more tax to make up the difference required to fund our schools, hospitals and welfare.’
Sorry, but that is a basic fail. If you increase their tax, we’ll end up paying for it, one way or another. There is no free lunch. If they’re making a 30% margin at the moment, they’re hardly likely to just go, ‘Oh, heck, we’ll just take 21.6%’, let alone now charging GST on top of that. We are a microcosm and they’ll just charge us more for the services, either through higher prices or +GST.
Our ‘Little New Zealand’ mentality, as an import from England, is a major fail and what’s being advocated here. We should be utilising our position to encourage more business here, including through improving our tax system, not trying to rope foreigners into complying with our tax laws for the sake of ‘fairness’.
And, in the end, if we wanted them to pay more tax, we’d simply change our tax laws. Enforcing it would be nigh on impossible, and would probably result in a withdrawal of services from our market (or loss of future services), but it’s doable. So stop complaining about how little tax foreigners pay and accept that the GST and income tax nets just don’t work so well online (and we should be looking at alternative tax methods to deal with base erosion).