Budget 2017: Guide to Possible Tax Changes

25 MAY 2017
FOR IMMEDIATE RELEASE

Steven Joyce has intimated that this Budget will provide tax relief to New Zealanders through an adjustment in tax thresholds (rather than changes to rates).

As we go into the Budget lock up, the Taxpayers Union’ has put together some benchmark figures as a guide to judging the size of these possible changes:

Bracket Creep

To counteract fiscal drag since 2010 (adjusting thresholds for inflation) new tax thresholds need to increase to approximately:

• $0 - $16,000 for the 10.5% marginal tax rate (currently $14,000)

• $16,001 - $54,000 for the 17.5% marginal tax rate (currently $48,000)

• $54.001 - $79,000 for the 30% marginal tax rate (currently $70,000)

• $79,000+ would be taxed at the 33% marginal tax rate (this currently kicks in at $70,000)

Fiscal Impact: $0.96 billion

A “Meaningful Tax Cut” - John Key

A meaningful tax relief package of $3 billion (the John Key size tax cuts) would require tax thresholds increase to:

• $0-$25,000 (10.5%)

• $25,000-$65,000 (17.5%)

• $65,000-$100,000 (30%)

• $100,000+ (33%)

Fiscal Impact: $3 billion

For more information refer to ‘Option 4’ in our report, '5 Options for Tax Relief in 2017' available at www.taxpayers.org.nz/5_options.

ENDS

© Scoop Media