Finance Minister Steven Joyce says international co-operation is the key to making multinationals pay their fair share of tax, not writing to them with threats of punitive action.
Labour leader Andrew Little said on Tuesday he had written to about 50 multinationals operating in New Zealand telling them they should pay their fair share.
If they deliberately avoided paying, a Labour-led government would impose penalty taxes.
Mr Little said Labour was budgeting an extra $200 million a year in revenue from the multinationals.
Mr Joyce said the government had been working with other OECD countries and last month signed an international agreement on multinational taxation measures.
The rules around them would be tightened and Mr Joyce said he expected about $100m a year in tax revenue.
"We're doing the real grunt work and Labour is nowhere near it," he said.
"The issue is making sure we work with other countries, make sure companies can't shift profits into other jurisdictions."
Mr Little has released the letter he's written to the companies, without identifying them.
Facebook, Google and Apple have been reported as examples of multinationals that pay very little tax in New Zealand compared with the size of their operations.
Taxpayers' Union economist Jim Rose doesn't think Labour would get anything like the expected $200m a year.
"Comparing Labour's revenue forecast of $200m to the United Kingdom's forecast revenue of 350m British pounds for effectively the same policy makes it look even more unrealistic," he said.
"London is a global financial centre where plenty of companies should be banking their profits at their London-based global headquarters, so would presumably gain the most from tax reallocation measures."