The New Zealand government on Monday announced plans to impose a new tax on big online companies such as Facebook and Google. The government says that these online companies make a lot of money in our country but pay very little tax.

New Zealand Prime Minister Jacinda Ardern said there is a big difference between income and tax, which needs to be reduced. Our current tax system is not appropriate in such a way that it can treat individual taxpayers and multinational companies differently. Which is not good.

He said that multinational online companies would have to pay about 2 to 3 per cent of their earnings in New Zealand as tax under the proposed digital service tax. These tax rates are in line with other countries. Revenue Minister Stuart Nash said that foreign online companies have a competitive advantage over local companies. Local companies pay a significant amount of tax. He said that the new tax will be applicable from next year.

The New Zealand government estimates that multinational online companies do about 2.7 billion New Zealand dollars (US $ 1.9 billion) in the country every year and the new tax will collect 80 million New Zealand dollars ($ 5.5 million) annually to the government.

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