GO
Loading...

Multinationals face further tax crackdown: NZ Deputy

Bill English, New Zealand's deputy prime minister and minister of finance, has told CNBC that global governments' hunger for revenue will lead to more pressure on multinationals to pay the correct tax levels.

While many multinationals have managed to avoid high taxation, English said this would gradually change.

"You wouldn't want to underestimate the hunger for revenue in governments who are going to find those four or five years of fiscal tightness are going to wear out their electorate," he said.

"They're still going to need a lot of revenue; they haven't even started bringing their debt levels down yet, so you're talking about a long running game here."

This is English's first appearance at the World Economic Forum (WEF), and before he arrived in Davos, English told the media in New Zealand that he wanted Google, Apple, Starbucks and other multinationals to pay more tax and said he wanted the issue to be discussed at the WEF.

He said that ensuring companies pay their fair share of tax required international collaboration.

(Read more: This will be the 'rock star' economy of 2014)

However, revenue issues are not something New Zealand needs to worry about too much at the moment. The country has been tipped as the "rock star" economy of 2014, with growth set to outpace most of its developed markets peers, according to HSBC.

The bank forecasts the economy will grow 3.4 percent in 2014 - the fastest pace since 2007 and well above trend growth of 2.5 percent. For 2013, the economy is expected to post growth of 3.0 percent.

(Read more: New Zealand economy gallops into New Year, rate rises loom)

Regarding New Zealand's recovery, English said: "We did a significant tax reform: we reduced our income in company taxes significantly and increased our consumption taxes…And we've also worked quite hard on public sector reform, so government as a proportion of the economy is dropping around a percentage point per year."

He added: "For the last four or five years through our recession, we've spent a lot of time on micro-economic reform,so our businesses and households are coming out of recession in pretty good shape; they're resilient, they're adaptive, and they're increasingly confident.

(Read more: Davos live blog: Getting down to business)

Featured

  • Argentina, Buenos Aires

    The global elite have stumbled on an emerging market sell-off that served as a reminder of the risks the global economy still faces.

  • A logo sits on a sign at the World Economic Forum in Davos, Switzerland, on Thursday, Jan. 23, 2014.

    Sure there was talk of women's issues at Davos but this female CEO says one of the questions she got asked a lot was: Are you here as a spouse?

  • The World Economic Forum logo in Davos, Switzerland.

    Here’s a five-point reality check for why people need to stop bashing Davos as an irrelevant gathering of the elite. By the executive director of Wharton's Risk Management Center.

  • Marissa Mayer

    Negotiations over the U.S. debt ceiling are still one of the biggest risks facing the world, according to Yahoo CEO Marissa Mayer.

Videos

Latest Special Reports

  • An era of innovation dominated by secretive corporate labs is ending. Time for you to help crowdfund the future.

  • Tips on the best-performing portfolio strategies and global market trends that can help you become a smarter investor.

  • CNBC and Institutional Investor host the 4th Annual Delivering Alpha Conference.