Carbon Tax Needed in New Zealand

July 19, 2016 Taxation in New Zealand

WELLINGTON – A carbon tax in New Zealand could help reduce emissions, while raising enough revenue to lower consumption tax, corproate tax rates, and to introduce a tax-free threshold for personal incomes.

In a press release issued on July 18th the Green party of New Zealand claimed that new research completed by experts from the University of Auckland and the Cambridge University has shown that the country should implement a carbon tax in order to pay for cuts to consumption tax.

According to the results of the research, if New Zealand implemented a carbon tax and hiked the price of carbon to NZD 75 per tonne, then the overall emissions level in New Zealand could be reduced by 14.2 percent.

Along with the reduction in harmful emissions, the national GDP could rise by 2.2 percent, while the tax revenues expected to be raised from the changes would allow the government to drop the rate of the Goods and Service Tax by 2.5 percent, from the current rate of 15 percent.

The current price of carbon in New Zealand has been capped at NZD 25 per tonne.

The Green Party claims that the research backs plans for a carbon tax that the Party had proposed earlier, a plan which would allow the government to also introduce a tax-free income threshold and to cut the tax rates for businesses.

Photo By: Alex