Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Tax Working Group makes “sensible and pragmatic” proposal

Chartered Accountants says Tax Working Group makes “sensible and pragmatic” proposal on taxing capital gains

20 September 2018

For immediate release

Tax Working Group makes “sensible and pragmatic” proposal on taxing capital gains

Retirement savings taxes “kicked for touch,” but warning about picking winners

CA ANZ applauds focus on reducing tax compliance costs for small businesses

The Tax Working Group today indicated there’s no need to start from scratch to extend the taxation of income on capital. “The status quo is a perfectly fine launch pad for what the Government wants to achieve,” said John Cuthbertson, New Zealand Tax Lead for Chartered Accountants Australia and New Zealand (CA ANZ).

Commenting on the release of the working group’s interim report today, he said “the capital gains the Government is seeking to tax could be best targeted by expanding the existing income tax regime rather than introducing a separate Capital Gains Tax.”

The group is considering two main options:

• Extending the existing tax net by taxing gains on assets not already taxed

• Taxing certain assets, such as shares, on a deemed rather than actual basis

Cuthbertson said an example of how the existing tax system could handle capital gains was land speculation. “Inland Revenue has plenty of tools under the existing land tax provisions to address speculative behaviour. Gains from sales of residential rental property can be adequately dealt with by an extension of these provisions.”

As the working group acknowledges, a standalone Capital Gains Tax introduces complexity and extra compliance costs, he said.

Retirement savings

The working group says it is giving further consideration to the choices and trade-offs around retirement savings.

Cuthbertson said this was a “kick for touch, or at least till February when the final report is out. The design of a capital gains mechanism could ultimately decide winners and losers based on the form of ‘retirement saving’.

“Kiwis save for their retirement in many ways. Any taxes or concessions for retirement savings need to be fair to all forms of retirement savings. Picking winners by deciding which forms of savings are in, or out, of scope may create a dilemma for the Tax Working Group.”

If the group decides to specifically exempt savings held in Kiwisaver, the incentive created needs to be acknowledged.

Small business

“Chartered Accountants Australia and New Zealand congratulates the working group on its recognition of the disproportionate burden tax compliance costs impose on small businesses,” Cuthbertson said. Reducing this burden will be more meaningful for small business than a progressive or reduced company tax rate.

“Our small businesses are often treated as if they have a big business finance team to meet the demands of our tax system.

“Compliance and complexity creep are more than annoying – they are now seriously hurting the 97 percent of Kiwi enterprises with fewer than 20 employees.”

CA ANZ supports further work being undertaken to investigate a reduction in compliance costs as an alternative to introducing a progressive company tax rate. CA ANZ offered a number of alternatives during consultation to reduce compliance costs.

Acknowledgement by the group that the current disputes process is not fit for small businesses, and the recommendation of a taxpayer advocate service to assist taxpayers with Inland Revenue disputes is welcomed by CA ANZ. This recommendation is in line with our earlier consultation with the group.

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On What Triggered The Carnage In Gaza

At last count, 195 Palestinians have reportedly died in the latest round of violence, 55 of them children. Roughly ten times that number have been wounded, and thousands made homeless. On the Israeli side, 8 people have died from rockets fired from Gaza. The imbalance in casualties reflects the vast gap in weaponry between the two sides. The Israelis are carrying out air strikes with impunity on densely populated civilian neighbourhoods... More>>


Office Of The Speaker: 2021 Register Of Pecuniary And Other Specified Interests Presented

The 2021 Register of Pecuniary and Other Specified Interests of Members of Parliament was presented to the House today. It contains a summary of members’ pecuniary and other specified interests as at 31 January 2021. The Speaker of the House, Rt Hon ... More>>

Budget 2021: Boosts Carbon Neutral Government Commitment

· Budget 2021 delivers $67.4 million to support the transition to a carbon neutral public sector by 2025 · State Sector Decarbonisation Fund receives significant boost to support more schools, hospitals and other government organisations to replace ... More>>

Government: To Rev Up Reductions In Transport Emissions

The Government is calling for feedback on a range of potential policies to eliminate emissions in the transport sector. Transport Minister Michael Wood today released Hīkina te Kohupara – Kia mauri ora ai te iwi - Transport Emissions: Pathways to ... More>>

Child Poverty: Reports Highlight Need For Ongoing Action

The Government has released the first Annual Report for the Child and Youth Wellbeing Strategy and the second Child Poverty Related Indicators (CPRI) Report, both of which highlight improvements in the lives of children as a result of actions of the Government, ... More>>


PM: Statement On The Speaker And Annual Review Debate

“The serious issue of alleged sexual assault and harassment at Parliament was poorly managed and inappropriately politicised last night. The tone of the debate did not reflect well on Parliament as a whole,” Prime Minister Jacinda Ardern said. ... More>>

Local Government: Independent Review To Explore Future

Local Government Minister Nanaia Mahuta says an independent review of local government will explore how councils can maintain and improve the wellbeing of New Zealanders in the communities they serve long into the future. More>>





InfoPages News Channels