Christopher Luxon, New Zealand Prime Minister 2023

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#3217270 12-Apr-2024 10:06

thinkingtrex8848:

However, she might be thinking she is allowed to be as useless as previous 2 ministers though?

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#3217273 12-Apr-2024 10:10

sir1963:

Perhaps what COULD be done is to remove the tax deduction for businesses who use these companies, Apple, HP, etc , Alphabet, Facebook, Twitter, etc etc etc etc so that local advertising has a cost advantage. We already get overseas companies to collect GST on behalf of the government to improve the ability of local businesses to compete against imports.

Every time I see a suggestion like this, it makes me think - why wouldn't that business (assuming they are smart and have a ton of resources at their will) find creative ways to pass this cost to the customer?

Just like every other time Govt has imposed tax on any* businesses, it is the consumer that ended up with the added cost - somehow. I don't know how FB/Twitter will pass these costs on to consumer but fairly straightforward for Alphabet/Apple/HP to pass the cost on.

I wish tax was the answer to it all.

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#3217327 12-Apr-2024 10:26

sir1963:

Other countries are NOT going to run local NZ news stories, that is why it is so important to have a local industry. Just ask yourself how much "local" news do we get from Rarotonga...

THEN we get to the issue that the overseas companies will not employ locals, nor will they pay taxes here, so we both lose capability AND tax income.

Perhaps what COULD be done is to remove the tax deduction for businesses who use these companies, Apple, HP, etc , Alphabet, Facebook, Twitter, etc etc etc etc so that local advertising has a cost advantage. We already get overseas companies to collect GST on behalf of the government to improve the ability of local businesses to compete against imports.

When you look at the press releases on Scoop you soon realise that there is little local news other than regurgitated press releases. And there are plenty of nights when one asks the question about the relevance of a local story when the world news is so poor. Its almost like the local reporter has to submit something to justify their job. Its no wonder people switch off.

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#3217344 12-Apr-2024 11:14

thinkingtrex8848:

sir1963:

Perhaps what COULD be done is to remove the tax deduction for businesses who use these companies, Apple, HP, etc , Alphabet, Facebook, Twitter, etc etc etc etc so that local advertising has a cost advantage. We already get overseas companies to collect GST on behalf of the government to improve the ability of local businesses to compete against imports.

Every time I see a suggestion like this, it makes me think - why wouldn't that business (assuming they are smart and have a ton of resources at their will) find creative ways to pass this cost to the customer?

Just like every other time Govt has imposed tax on any* businesses, it is the consumer that ended up with the added cost - somehow. I don't know how FB/Twitter will pass these costs on to consumer but fairly straightforward for Alphabet/Apple/HP to pass the cost on.

I wish tax was the answer to it all.

It's NOT FB etc who will be paying for it, the loss of deduction is the inability for local NZ firms to claim overseas expenditure (that is untaxed in NZ) as an expense.

It just makes local businesses more attractive financially.

We should also limited the amount of expenses for say "intellectual property" these companies can dump onto our tax system as deductions here because they are being charged by some shell company in a tax haven. No company can survive in reality with such high costs, so you limit them to 10% max. Again make these multi billion dollar overseas companies pay their share of tax for doing business here in NZ.

Apple for example sold NZ$4.5 BILLION into NZ, but paid $0 tax because they are located in Australia. Apples margins site somewhere between 25-30% IIRC, so in theory Apple made $1.5 Billion profit here in NZ and we lost about $300 million in tax that could be paying for more police, better health, education, etc etc etc.

So either Apple gets to pay tax here in NZ, or NZ companies loose the tax deduction ability, ie we tax them by proxy. This will in turn make their products less desirable and lower market share which in turn lowers profits.

Remember we are NOT taxing Apple, so they are not going to throw their toys out of the cot and leave, we are just claiming the tax through a local means.

BTW I am an Apple user, and I STILL object to what they do.

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#3217352 12-Apr-2024 11:26

sir1963:

So either Apple gets to pay tax here in NZ, or NZ companies loose the tax deduction ability, ie we tax them by proxy. This will in turn make their products less desirable and lower market share which in turn lowers profits.

Remember we are NOT taxing Apple, so they are not going to throw their toys out of the cot and leave, we are just claiming the tax through a local means.

BTW I am an Apple user, and I STILL object to what they do.

I'm all for it.

I'm just saying, companies like Apple aren't going to play ball. If there is additional cost added to the chain, it gets passed on to the consumer most times.

I'm not saying don't do it, but do it after fair bit of thinking and analysis - unlike previously they tried to double tax investors which was a major fail and rightly so as called out by mostly all economic and financial bodies at the time.

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#3217355 12-Apr-2024 11:31

sir1963:

Perhaps what COULD be done is to remove the tax deduction for businesses who use these companies, Apple, HP, etc , Alphabet, Facebook, Twitter, etc etc etc etc so that local advertising has a cost advantage. We already get overseas companies to collect GST on behalf of the government to improve the ability of local businesses to compete against imports.

That would be an unmitigated disaster. For a start you're advocating that one type of legitimate business expense be treated differently for tax purposes than another, which is intellectually dishonest given that treating all legitimate business expenses the same has been your argument for why it's unfair that property investors lost the ability to claim tax deductions on interest expenses.

Second, how would that even work? Drafting that would be an absolute mess - would it only apply to advertising?

If you want to run advertising online, you don't have a choice but to run Google Ads, since the Google Adsense for Publishers networks make up pretty much every high traffic site on the internet. Even advertising on Geekzone itself is via Google Ads (though I believe GZ does have other advertising mechanisms via forum sponsorships that have been trialled in the past).

If you want it to apply to all expenses, not just advertising, then how would it work? Let's say you buy an HP printer from Ingram Micro. Ok, Ingram Micro is NZ registered so that's a legitimate deduction in your model. Ingram Micro still has to buy the printer from HP, but suddenly it's not a legitimate deduction because HP is registered overseas? So Ingram Micro can't deduct it from their taxes, and is suddenly facing a multi-billion dollar hole in their finances because you didn't think through the snowball effects - within years either every single importer/wholesaler in NZ has gone bankrupt, or the government has repealed the disastrous law.

Or maybe you say HP has to incorporate in NZ. Ok fine, they do that (they probably already did but that's neither here nor there) - HP NZ still has to buy the printer from HP USA, or HP China, or HP Vietnam, wherever the thing is manufactured. All you've done is move the bankruptcy to a different part of the supply chain.

sir1963

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#3217401 12-Apr-2024 14:24

Kyanar:

sir1963:

Perhaps what COULD be done is to remove the tax deduction for businesses who use these companies, Apple, HP, etc , Alphabet, Facebook, Twitter, etc etc etc etc so that local advertising has a cost advantage. We already get overseas companies to collect GST on behalf of the government to improve the ability of local businesses to compete against imports.

That would be an unmitigated disaster. For a start you're advocating that one type of legitimate business expense be treated differently for tax purposes than another, which is intellectually dishonest given that treating all legitimate business expenses the same has been your argument for why it's unfair that property investors lost the ability to claim tax deductions on interest expenses.

Second, how would that even work? Drafting that would be an absolute mess - would it only apply to advertising?

If you want to run advertising online, you don't have a choice but to run Google Ads, since the Google Adsense for Publishers networks make up pretty much every high traffic site on the internet. Even advertising on Geekzone itself is via Google Ads (though I believe GZ does have other advertising mechanisms via forum sponsorships that have been trialled in the past).

If you want it to apply to all expenses, not just advertising, then how would it work? Let's say you buy an HP printer from Ingram Micro. Ok, Ingram Micro is NZ registered so that's a legitimate deduction in your model. Ingram Micro still has to buy the printer from HP, but suddenly it's not a legitimate deduction because HP is registered overseas? So Ingram Micro can't deduct it from their taxes, and is suddenly facing a multi-billion dollar hole in their finances because you didn't think through the snowball effects - within years either every single importer/wholesaler in NZ has gone bankrupt, or the government has repealed the disastrous law.

Or maybe you say HP has to incorporate in NZ. Ok fine, they do that (they probably already did but that's neither here nor there) - HP NZ still has to buy the printer from HP USA, or HP China, or HP Vietnam, wherever the thing is manufactured. All you've done is move the bankruptcy to a different part of the supply chain.

It only applies to overseas based companies that do business in NZ but don't pay taxes here. Those companies that do have a presence here and do pay taxes here are exempt . So if Facebook wanted to set up an office here where they paid actual (not tax dodge taxes) tax then they get to be deducted by local businesses. If facebook do it and google does not, then advertising on facebook become a better option for local businesses. We get THEM to compete.
This applies to ALL local businesses, it is not singling out any one business type
It applies to the likes of Apple who do NZ$4.5 BILLION in sales in NZ but pays zero tax here, therefore Apple products are not tax deductible . If a NZ business for example buys Starret micrometers to sell here, then that is exempt because of the local tax paying entity, they are employing local people, they are paying local taxes, but they also don't get to shuffle 90% of the profits to the Caribbean as "royalty" to avoid taxes. If PB tech imports Apple products into NZ and they pay taxes on their profits, then people who buy through PB tech can get the tax deduction.
Same with Ingram Micro.
HP moves here, and then the limit of "royalty payments" , or "intellectual licensing payments" or other ways of shunting profit overseas without adequate tax comes into play.
Lots of goods are traceable from raw materials to final products, for example aspirin , likewise foods, they have batch numbers, dates, etc so that managed recalls can happen.

The point is, these multinationals get the benefits of a stable economy with education, healthcare, law and order...but they contribute $0 towards it. They have become so big and so powerful they are almost out of reach for any government, they just threaten to leave and the government backs down, then pays them a large sum of money in compensation.

Look at the USA where states offer MASSIVE bribes and tax incentives for someone like Amazon to set up a fulfilment centre in their state.

There needs to be something done, everyone agrees , but no one wants to be the first over the wall....

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#3217414 12-Apr-2024 15:26

sir1963:

It only applies to overseas based companies that do business in NZ but don't pay taxes here. Those companies that do have a presence here and do pay taxes here are exempt . So if Facebook wanted to set up an office here where they paid actual (not tax dodge taxes) tax then they get to be deducted by local businesses. If facebook do it and google does not, then advertising on facebook become a better option for local businesses. We get THEM to compete.
This applies to ALL local businesses, it is not singling out any one business type
It applies to the likes of Apple who do NZ$4.5 BILLION in sales in NZ but pays zero tax here, therefore Apple products are not tax deductible . If a NZ business for example buys Starret micrometers to sell here, then that is exempt because of the local tax paying entity, they are employing local people, they are paying local taxes, but they also don't get to shuffle 90% of the profits to the Caribbean as "royalty" to avoid taxes. If PB tech imports Apple products into NZ and they pay taxes on their profits, then people who buy through PB tech can get the tax deduction.
Same with Ingram Micro.
HP moves here, and then the limit of "royalty payments" , or "intellectual licensing payments" or other ways of shunting profit overseas without adequate tax comes into play.
Lots of goods are traceable from raw materials to final products, for example aspirin , likewise foods, they have batch numbers, dates, etc so that managed recalls can happen.

You've completely ignored that if these companies do set up an office in New Zealand, they still have to get the products or services from wherever they are actually produced or performed. That's ignoring that they already do this. Facebook New Zealand Limited exists. Google New Zealand Limited exists. Hewlett-Packard New Zealand exists (weirdly, that one is an Unlimited company - don't see those every day).
You're absolutely singling out one business type, and only one expense type. Ah well, better remove tax deductibility on interest expenses for property investors then, apparently "one rule for all businesses" isn't all that fundamental a belief you hold when it doesn't impact you...
So basically, if it isn't produced in New Zealand, screw 'em? Because you have completely failed to address the fact that no matter what, at some point in the supply chain, under your model someone is going bankrupt. No manufacturer or importer could afford to actually import products into New Zealand under your scheme, and for those that could, they would have to increase prices dramatically which ultimately harms consumers.
Irrelevant.
No multinational is going to move to New Zealand to avoid such a ridiculous tax scheme. They'll just stop sales entirely - the country ain't big enough to be able to pull off forcing such a needlessly punitive regime. And since all those companies already exist in New Zealand but still have to get the product or service from an overseas entity... well, see answer 1.
What's that got to do with the price of fish?

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#3217432 12-Apr-2024 16:17

Kyanar:

sir1963:

It only applies to overseas based companies that do business in NZ but don't pay taxes here. Those companies that do have a presence here and do pay taxes here are exempt . So if Facebook wanted to set up an office here where they paid actual (not tax dodge taxes) tax then they get to be deducted by local businesses. If facebook do it and google does not, then advertising on facebook become a better option for local businesses. We get THEM to compete.
This applies to ALL local businesses, it is not singling out any one business type
It applies to the likes of Apple who do NZ$4.5 BILLION in sales in NZ but pays zero tax here, therefore Apple products are not tax deductible . If a NZ business for example buys Starret micrometers to sell here, then that is exempt because of the local tax paying entity, they are employing local people, they are paying local taxes, but they also don't get to shuffle 90% of the profits to the Caribbean as "royalty" to avoid taxes. If PB tech imports Apple products into NZ and they pay taxes on their profits, then people who buy through PB tech can get the tax deduction.
Same with Ingram Micro.
HP moves here, and then the limit of "royalty payments" , or "intellectual licensing payments" or other ways of shunting profit overseas without adequate tax comes into play.
Lots of goods are traceable from raw materials to final products, for example aspirin , likewise foods, they have batch numbers, dates, etc so that managed recalls can happen.

You've completely ignored that if these companies do set up an office in New Zealand, they still have to get the products or services from wherever they are actually produced or performed. That's ignoring that they already do this. Facebook New Zealand Limited exists. Google New Zealand Limited exists. Hewlett-Packard New Zealand exists (weirdly, that one is an Unlimited company - don't see those every day).
You're absolutely singling out one business type, and only one expense type. Ah well, better remove tax deductibility on interest expenses for property investors then, apparently "one rule for all businesses" isn't all that fundamental a belief you hold when it doesn't impact you...
So basically, if it isn't produced in New Zealand, screw 'em? Because you have completely failed to address the fact that no matter what, at some point in the supply chain, under your model someone is going bankrupt. No manufacturer or importer could afford to actually import products into New Zealand under your scheme, and for those that could, they would have to increase prices dramatically which ultimately harms consumers.
Irrelevant.
No multinational is going to move to New Zealand to avoid such a ridiculous tax scheme. They'll just stop sales entirely - the country ain't big enough to be able to pull off forcing such a needlessly punitive regime. And since all those companies already exist in New Zealand but still have to get the product or service from an overseas entity... well, see answer 1.
What's that got to do with the price of fish?

Yes but the like of facebook hide their profits via Caribbean tax shelters by using "trade name fees, Intellectual property fees, etc" shuffle 90% of their income to the tax shelter and the other 10% gets written off via operating expenses here in NZ. My local plumber can't, news papers can't, TVNZ/TV3 can't. Because of this these external multinationals can undercut the local suppliers and drive them out of business meaning they gain even MORE market share, they can increase their prices and STILL PAY NO TAX.

So NZ based businesses pay tax, but foreign businesses pay none. WHO is being disadvantaged here ?
And by singling out you mean those that do not pay tax ?

Let me know of any NZ company that can do NZ$4.5 billion in sales and pay $0 in tax

Incorrect, as I said if someone imports Starret Micrometers, they buy at wholesale, they sell here at retail, and they pay taxes on the profits. Better yet they employed other people who also pay taxes. They are NOT buying at wholesale, selling at retail, claiming 90% of the profits are going to Barbados as "intellectual property etc" and pay $0 taxes.

No multinational needs to move here, nor will they walk away, there is ZERO additional expense added onto them.
And no one is going bankrupt, how do you think existing businesses in NZ operate by selling goods made overseas.
It will not impact 99% of retail businesses at all except where tax dodging multinational are concerned ie companies like Google who remove 90+ percent of their turn over as "intellectual property fees" via some shell company in the Bahamas so they pay no tax on it there, here, or in the USA, they are effectively operating a tax free enterprise.

The current system encourages big business to avoid taxes this way to remain competitive , meaning more taxes get paid by wage earners who can not dodge taxes.
IIRC some years back corporates accounted for about 10% of NZs tax take.

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#3217458 12-Apr-2024 17:06

Ok, you clearly do not understand how the tax system works, since a significant amount of what you have said is patently false.

There are valid issues in the area of transfer pricing, that people with significantly more skin in the game and resources to address it than anyone here on GZ (i.e. governments) are even now trying to work through (with varying levels of success), but your idea will do nothing but obliterate the viability of import. That's on top of the mental gymnastics required to continue to promote it while being quite vocal in claiming in the past that it's unfair that property investors had interest deduction denied while every other legitimate business expense was considered fine.

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#3218009 14-Apr-2024 10:16

Luxon once again indicates he's interested in reviewing charitable tax exemptions:

Newshub: "I've actually been thinking through the broader dimension of our charitable taxation regimes," he told Newshub. Under New Zealand law, churches are exempt from paying tax, but Luxon has left the door open for changes. "We will certainly be looking at things like that this term, yep," he said.

One thing that surprised me in that article - churches and the like don't pay rates.

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#3218014 14-Apr-2024 10:25

gzt: Luxon once again indicates he's interested in reviewing charitable tax exemptions:

Newshub: "I've actually been thinking through the broader dimension of our charitable taxation regimes," he told Newshub. Under New Zealand law, churches are exempt from paying tax, but Luxon has left the door open for changes. "We will certainly be looking at things like that this term, yep," he said.

One thing that surprised me in that article - churches and the like don't pay rates.

Pleasantly surprised that this came from Luxon considering his personal views(which imo shouldn't really be questioned as everyone is entitled to their personal views vs professional views).

I don't know much about how churches work - from recent media, Destiny is in the midst of everything controversial so that is easy to judge.

But I've heard some compelling arguments that most of the proper charitable initiatives are by various Churches so a little un-decided if it is such a bad thing to let the proper charities to be exempt.

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#3218046 14-Apr-2024 11:44

Luxon's comments indicate a measured review of charitable status and exactly what it applies to. There is no indication Luxon is considering a total end to that status for religiously motivated charitable activities.

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#3218049 14-Apr-2024 11:51

thinkingtrex8848:

gzt: Luxon once again indicates he's interested in reviewing charitable tax exemptions:

Newshub: "I've actually been thinking through the broader dimension of our charitable taxation regimes," he told Newshub. Under New Zealand law, churches are exempt from paying tax, but Luxon has left the door open for changes. "We will certainly be looking at things like that this term, yep," he said.

One thing that surprised me in that article - churches and the like don't pay rates.

Pleasantly surprised that this came from Luxon considering his personal views(which imo shouldn't really be questioned as everyone is entitled to their personal views vs professional views).

I don't know much about how churches work - from recent media, Destiny is in the midst of everything controversial so that is easy to judge.

But I've heard some compelling arguments that most of the proper charitable initiatives are by various Churches so a little un-decided if it is such a bad thing to let the proper charities to be exempt.

Yeah, but how many Harley Davidson's does dead Jesus actually need ?

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#3218054 14-Apr-2024 12:04

sir1963:

Yeah, but how many Harley Davidson's does dead Jesus actually need ?

Like I said previously, Destiny and similar churches - easy to pass judgement as they seem to do more harm than good.

I don't want to get into pointless argument but if you are truly curious, look into the insane amounts of money and charitable work various churches contribute to society. Some truly deserve the charity exemption but most don't.

I'll even go as far as saying Jesus was the first true Leftie, all about sharing wealth, pay taxes etc

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