Major Pharmaceuticals Dodging NZ Taxes

September 18, 2018 Taxation in New Zealand

drug companiesWELLINGTON – Oxfam is claiming that pharmaceuticals are “cheating” New Zealanders out of millions in taxes.

On September 18th the New Zealand wing of Oxfam International issued a press release claiming that major drug and pharmaceutical companies are underpaying their taxes by millions each year.

Oxfam claims that drug companies are “cheating New Zealand out of millions in tax revenue” by shifting their profits to low-tax jurisdictions.

By moving their profits out of New Zealand, the companies are able to bypass paying income tax on their actual earnings made from New Zealand activity.

According to the Oxfam New Zealand, over the years between 2013 and 2015, the total amount of approximately NZD 21 million of potential tax revenue was unfairly unpaid by the Pfizer, Merck, Johnson & Johnson and Abbott.

Oxfam further estimated that the amount of tax which was not paid is enough to employ “400 newly graduated and much needed nurses.”

Further, Oxfam claimed that as large companies dodge their tax obligations, the impact falls on the lowest-earning people in society, as the government scrambles to close budgetary gaps by cutting funding to essential services.

Elaborating further on the impact of the drug companies behaviour, Rachael Le Mesurier, Oxfam New Zealand’s Executive Director, said: “Somebody always pays the price for a companies’ unscrupulous behaviour, and it’s not the company. It’s us – average Kiwis. And it hurts the poorest women and children in the poorest parts of the world even more.”