WELLINGTON – Tax cuts, streamlined tax administration, economic growth, and new taxes on foreign investment and services are on the table for New Zealand in 2016, according to the national Prime Minister.
On February 10th the Prime Minister of New Zealand John Key delivered a formal statement to Parliament detailing the government’s plan and economic outlook for the 2016 year, describing several tax changes but warning that the overall financial position may not be as positive as previously forecast.
He said that over the course of this year the government’s main focuses will remain on responsible management of the national finances, fostering a more competitive and productive economy, delivering public services to New Zealanders, and continuing to nurture the rebuilding of the earthquake stricken city of Christchurch.
Describing the overall economic outlook for New Zealand, the Prime Minister said that economic growth is expected to reach an average of 2.7 percent per year over the next 5 years, and wages should continue to grow at a level exceeding inflation.
He added that dips in the price of dairy exports will ultimately result in “…slightly less tax revenue, slightly lower operating balances and slightly higher debt, compared to Budget forecasts,” however the government will still maintain its budgetary goals, including enacting cuts to the rate of income taxes, if the financial situation allows.
John Key also confirmed that the government will continue with the current plan to implement withholding taxes on property investments made by individuals residing outside of New Zealand, and also with the plan to implement GST on the purchase of intangible goods from overseas and online.
He continued to say that the government will also continue to support the current efforts by the national tax authority to modernize its entire tax system, and also efforts by other authorities to simplify and streamline tax administration matters for small businesses and importers.