Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Tax Working Group more than just Capital Gains Tax


With the Tax Working Group (TWG) releasing their interim report, there were three key issues arising from it that Tony Marshall, tax advisory partner for Crowe Horwath, believes will have a wide-reaching impact on farming in New Zealand for decades to come.

As promised during the election campaign, the government formed a Tax Working Group to examine further improvements in the structure, fairness and balance of the tax system. One area of focus of the group has been whether New Zealand needs a capital gains tax (CGT). CGT has always been a contentious topic and sends nervous tension through the farming community however it was not the only issue arising from their findings for the farming community.

CGT is leading the headlines however issues around environmental taxes and existing deductions for development expenditure are equally as important and need to be addressed,” Marshall states.

“Emissions for farming is something that needs to be addressed at the farm gate, not at the processor level, to provide farmers with the opportunity to reduce and mitigate their own emissions. If emission are levied at the processor level it is really just another tax. With the Emissions Trading Scheme (ETS) already established the framework for this regime has already been laid out and can easily be applied to agriculture when it comes into the ETS,” Marshall explains.

Marshall also warns of the implications for future generations of farmers if a CGT goes ahead without very careful examination of how and when rollover relief would apply. “If a CGT is to be paid on an asset being transferred from one generation to the next, it would create a significant hole in any cash required to complete the deal. This would encourage farmers to defer the sale, until they pass, so it can then be inherited”. An inheritance tax has been specifically ruled out in the TWG terms of reference.

With a number of implications, and complexities ahead of the government to implement a CGT and/or environmental taxes, Marshall urges the Government to consider the effect this could have in the decades to come on what remains the backbone of New Zealand’s economy.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Forest And Bird: Misinformation Circulating On Biodiversity Policy

Forest & Bird is concerned at misinformation circulating regarding a policy statement aimed at protecting New Zealand’s unique biodiversity. The National Policy Statement for Indigenous Biodiversity is being consulted on by the ... More>>


NIWA: Scientists Say Methane Emitted By Humans ‘vastly Underestimated’

NIWA researchers have helped unlock information trapped in ancient air samples from Greenland and Antarctica that shows the amount of methane humans are emitting into the atmosphere from fossil fuels has been vastly underestimated... More>>


SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>


Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>


Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>


NZ First: Launch Of Parliament Petition To Remove Aluminium Dross

This afternoon to a crowd of over 100 people in Mataura -- Mark Patterson, New Zealand First List MP based in Clutha-Southland launched a parliamentary petition regarding the aluminium dross issue in Mataura, Southland. The petition asks that the House ... More>>