Next Wednesday for Tax Working Group report

Friday 15th January 2010

Jan. 15 (BusinessWire) – The final report of the Victoria University Tax Working Group on strengthening the New Zealand tax base is due out next Wednesday.

The TWG is already substantially influencing tax policy-making and the conclusions of its final report will inevitably shape what could be the most comprehensive tax reform in a generation, to be announced in this year’s Budget.

Earlier this week, Prime Minister John Key said "ultimately lowering" personal tax rates would be part of the National-led government’s wider agenda along with “shoring up the tax base".

Key has ruled out capital gains tax on sale of the family home, but no other part of the working group's findings so far.

The results of Australia's federal tax system overhaul, the Henry Review, will also be critical to tax policy since a big Australian corporate tax cut would almost certainly be followed in New Zealand.

Finance Minister Bill English has been coy on whether a land tax could be adopted, another issue where the Henry Review could be decisive for New Zealand.

Last September, the working group, which doesn’t have a government mandate but involves collaboration between non-government tax experts and officials from The Treasury and Inland Revenue, recommended a land tax as more efficient and simple than a capital gains tax.

Rental property was singled out as the “glaring hole” in the tax base in the September report, with the $200 billion sector getting refunds when it could be paying tax of between $500 million and $900 million.

Businesswire.co.nz

Comments from our readers

No comments yet