New Tax - New Headache
Dr Cullen's brand new tax on superannuation savings breaks his pre-election promise of no new taxes and creates administrative headaches for employers and employees, Opposition Revenue Spokesperson Annabel Young said today.
"The Government tried to tell New Zealanders and business there would be no new taxes until after the review of taxation. He has now announced the 5 per cent 'fund withdrawal tax' on superannuation.
"The Government wants to stop people avoiding the 39 cent tax rate - this change just means they'll avoid it in a different way. All the Government has done is give them new and better ways to avoid the tax.
"We are seeing classic bad tax policy in the making - legislation was rushed through before Christmas and now the Government is trying to plug the gaps.
"Any increase in taxation means there is more incentive for tax avoidance, a fact which Dr Cullen seems to have just realised.
"This new tax just patches up the Minister's mistakes and makes the tax system more complicated and time-consuming.
"The Government's tax hikes go from bad to worse. In a few days they will be forcing New Zealanders to pay more tax, when the economy clearly shows they don't need to.
"They've mucked up the law change and created all sorts of anomalies and unfairness and are bringing in more complexity and costs through the 'fund withdrawal tax' and the three tier fringe benefit taxes.
"Small and medium sized business need less hassle, administration and tax headaches not more."