Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Huge concern at capital gains tax bill

John Key MP
National Party Finance Spokesman

2 August 2006

Huge concern at capital gains tax bill

More than 3,500 submissions have been received on the Government's bill introducing a capital gains tax on many overseas share investments, says National Finance spokesman John Key.

"Usually a tax bill gets about 50 submissions, if you're lucky.

"The number of submissions on this bill shows the overwhelming level of concern people have about the Government introducing a capital gains tax on their savings.

"IRD estimates that about 20,000 people who have shares in companies in the US, Britain and five other 'grey list' countries will be hit by the tax.

"They will also be hit by substantial compliance costs. This is a complex system to understand, and advice from accountants is that it could cost affected people some $500 in accounting fees each year. That makes a total of $10 million in costs, and all for a measly $8 million in taxes for the Crown.

"And it's not only these 20,000 people who will be hit by the capital gains tax. Anyone who has savings - no matter how small - in funds which directly or indirectly make passive investments in those grey list countries will also be affected.

"That's potentially hundreds of thousands of ordinary savers.

"The Government expects the tax grab from these passive investments to total a far more substantial $45 million.

"National opposes this new tax grab by Labour, and we expect that almost all of the submissions to the select committee will oppose it as well."


Attached: PQs 08857 and 08858

8857 (2006). John Key to the Minister of Revenue (14 July 2006):
Further to his answer to question for written answer 06581 (2006), how much of the $27 million revenue gain from changing the tax rules on collective investment vehicles in relation to their share investments outside New Zealand and Australia is revenue from taxing passive funds on share gains; what explains the balance of this $27 million revenue gain, if there is one?

Hon Peter Dunne (Minister of Revenue) replied: The revenue estimates relating to changing the tax rules for collective investment vehicles in relation to their share investments outside New Zealand and Australia are based on Funds that currently pay tax only on dividends (generally "passive funds") paying approximately an extra $45 million in tax each year under the new rules, while other managed funds would pay approximately $18 million less in tax each year.

8858 (2006). John Key to the Minister of Revenue (14 July 2006):
What is the Inland Revenue Department's best estimate of the number of people currently holding shares costing more than $50,000 in companies resident in grey list countries, excluding Australia?

Hon Peter Dunne (Minister of Revenue) replied: Inland Revenue estimates that about 20,000 taxpayers have shares costing more than $50,000 in companies resident in grey list countries other than Australia. It is emphasised that this is an estimate based on limited information.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On The Peters/Ardern Triumph

There are a lot of good reasons to feel joyful about this outcome. It is what so many young voters – the best hope for the country’s future – wanted.

Far more important than the implications for the Economy Gods ( is the dollar up or down? ) last night’s outcome will also mean many, many vulnerable New Zealanders will have a better life over the next three years at least.

Yet the desire for change was in the majority, across the country..>>>More


Labour on its agreement |Peters: Post-Election Announcement Speech | Greenpeace “cautiously hopeful” about new Government | ACT - Madman on the loose | E tū ecstatic | Chamber welcomes the outcome | Greens on their joining Govt | EDS welcomes new govt | Immigrant groups worry | Feds ready to engage new coalition government | Labour Ministers of the Crown announced


Climate: Increasing Greenhouse Emissions Hit NZ

New Zealand is seeing impacts of excess greenhouse gas emissions in our climate and oceans, according to the latest national report from the Ministry for the Environment and Stats NZ about the state of the atmosphere and climate…More>>


Wellington.Scoop: Arrests At Blockade Of "Weapons Expo"

“We encourage people in Wellington to get down to the Westpac Stadium now for a day of awesome peace action. There will be plenty of food, music and activities to keep us sustained through the day.” More>>


Rorschach Restructuring: PSA Taking Inland Revenue To Court Over Psychometrics

The Public Service Association will be seeing Inland Revenue in Employment Court over its intention to psychometrically test employees reapplying for their roles at the department as part of its controversial Business Transformation restructuring plan. More>>


Nuclear Disarmament: Nobel Peace Prize 2017 Awarded To ICAN

Congratulations from iCAN Aotearoa New Zealand to international iCAN, the other iCAN national campaigns and partner organisations, and the countless organisations and individuals who have worked so hard for a nuclear weapons-free world since 1945. More>>


Expenses: Waikato DHB CEO Resigns

An independent inquiry has identified that Dr Murray had spent more than the agreed $25K allocated for relocation costs, and other unauthorized expenses involving potential financial breaches of the chief executive’s obligations. More>>


Wellington.Scoop: Sad About The Trolley Buses?

The Regional Council’s MetLink is today spending money to tell us that it really loves Wellington’s trolley buses, even though they’re all being taken off our roads by the end of this month. More>>


Post-Election: Preliminary Coalition Talks Begin

New Zealand First will hold post-election preliminary discussions in Wellington with the National Party tomorrow morning and the Labour Party tomorrow afternoon. More>>




Featured InfoPages

Opening the Election