Key rules out new capital gains taxes, opposes GST increase

Monday 8th June 2009

Prime Minister John Key says capital gains taxes distort investment, don't work and are a nightmare to administer.

Key was quizzed on the issue at his weekly post-Cabinet press conference about work under way by a government tax review advisory group, and comments last week by the Treasury Secretary, John Whitehead, who advocates a capital gains tax on investment property.

While he was happy to see a debate on the issue, Key did not support any further taxes on capital gains than are already in place.

"My view about capital gains tax is that they don't work, they don't stop property bubbles; they do stop people moving their assets around, and they are hideously complex," Key said.

He also slapped down suggestions of a higher rate of GST, which Whitehead also appeared to favour by arguing for higher rates of consumption tax to offset lower personal and corporate tax rates, which he argued were holding New Zealand back as a migrant and investment destination.

Businesswire.co.nz

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