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Capital Gains Tax won’t help the Provinces

This Government seems hell bent on slowing the 56,000 businesses ($21 billion economy) in the Waikato through the introduction of a Capital Gains Tax, said Waikato Chamber of Commerce CEO Chris Simpson.

“Did they learn nothing from the 2001 Tax Working Group, ironically formed by Michael Cullen and which kicked out any notion of a Capital Gains Tax in 2001!

“It’s one of our competitive advantages of not having a Capital Gains Tax compared to other countries and it appears that advantage could be chucked out with the bath water hurting our 215,000 employees in the Waikato!

“Where’s the focus on reigning in government spending? There isn’t any. Where’s the focus on driving better efficiencies in local government? Yep, nadda! Why isn’t Government spending at 26% of GDP and not the current 32%?

“Where’s the reduction in corporate tax to 21% (which is the OECD average) from the current 28%?

“And the family home is exempt – seriously, that’s what’s been causing all the issues, so we’ve been told. Exempting parts of the economy just adds to the compliance issues.
“And let’s be honest, business is already taxed with the reality of the value of a business a simple net present value of expected income – meaning the value of a business has already been taxed. So, the reality is that any capital gain is after tax anyway – so, why double tax it?”
And it seems some business members on the Tax Working Group don’t like the capital gains aspect of the Cullen Tax Review just released. Robin Oliver, Joanne Hodge and Kirk Hope’s minority statement backs us up:

“The risks involved in extending capital gains tax beyond residential properties include: • Fiscal risks to the government • Compliance costs • Damage to equity markets • Inconsistency in the tax treatment of investors.

“Our current tax system is relatively simple and efficient. It does not overly stand in the way of the type of experimental behaviour we shall need to see more of in the future. In our view we would be better off amending some current rules (residential rental homes) and enforcing existing rules better."

“These are smart people who sat on the Taskforce and are disagreeing with it, said Mr Simpson.

“Straight to the pool room with the report we say!”

© Scoop Media

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