New Zealand’s Tax System is Unsustainable

November 26, 2009 Taxation in New Zealand  No comments

According to the Tax Working Group, a New Zealand Government sponsored think tank, the country’s tax system is unsustainable. The conclusion was presented in the summary paper of the Tax Working Group’s fifth meeting, published November 25th. Growth, fairness and integrity issues – were concluded to be the primary aspects of the problem.The meeting summary also stated that the country’s tax base needs to be broadened for these to be resolved.

The Tax Working Group is a New Zealand government initiated project, involving twelve private and academic sector taxation experts. According to Bob Buckle, Chairman of the Tax Working Group, the group “will consider topics like the fiscal framework, the structure of personal income tax, corporate tax, GST and the integrity of the tax system”.

The meeting summary paper has reveled that in an effort to broaden New Zealand’s tax base the Tax Working Group has investigated changes to GST rates, extensions in capital income taxation, land taxes, investment property taxation and the risk free return method of taxation. Alignment of New Zealand’s top personal, corporate and trust rates to 30% was also discussed.

The Tax Working Group’s preferred options for New Zealand’s tax system will be finalized following its planned conference on December 1st. The completed recommendations will be published in its report to the New Zealand Government, which is expected in early 2010.

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