Departure From Principled Tax Policy
24 August 2006
Institute Critical Of Departure From Principled Tax Policy
"The Government's departure from a principled tax policy on retirement savings is disturbing" Craig Macalister, Tax Director of the New Zealand Institute of Chartered Accountants said.
Mr Macalister was responding to news that employer contributions into the KiwiSaver scheme are to be given an exemption from specified superannuation contribution withholding tax up to 4% of an employees' salary.
"While the proposal will allow employees to save more into their KiwiSaver scheme, the Institute's view is that all savings vehicles should be treated equally. The creation of concessionary rules for pet political projects sets an alarming precedent."
"The Institute shares Government's concern that New Zealanders' retirement savings are inadequate. However, we don't believe a tax advantage should be given to people who choose to save through a one type of superannuation fund over another."