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

 

Capital gains tax disappointing for business

Key areas of the Tax Working Group Final Report released today were disappointing, says Canterbury Employers’ Chamber of Commerce Chief Executive Leeann Watson.

One of the most important and contentious elements of The Report, aimed at addressing the structure, fairness and balance of the New Zealand tax system, was around capital gains tax.

Ms Watson says the proposed capital gains rules should not be implemented because of the significant impact on small and medium-sized enterprises (SMEs).

"We support the Government’s review to ensure that our tax system is fit for purpose for a changing business environment. However, there is very real concern that taxing both shares and business assets under a comprehensive capital gains tax regime would create double taxation.

"This could disadvantage New Zealanders owning shares in New Zealand and create inconsistencies around overall taxation on investment."

Ms Watson says a capital gains tax would be unlikely to achieve the desired outcome for business.

"There is concern around the effect for capital markets in a capital constrained economy with a long-term savings deficit. Adding further tax on the savings and investment of those New Zealanders in the middle-income bracket won’t drive the deepening and broadening of the capital base that we need for business investment, which is higher productivity and wages.

"While the impetus behind the changes are aspirational, there is little to indicate they would significantly reduce overinvestment in housing or increase ‘tax fairness’. In addition, there is concern that additional administration costs and investment distortions could outweigh any benefits and potentially discourage much-needed investment and innovation by locking businesses into current asset holdings.

"It is vitally important that we remain competitive as a country and are not continuing to add further compliance for business and in particular small business, who represent 97% of all businesses in our economy."

Ms Watson says there needs to be a viable business case for any changes to the current tax system.

"There seems to be a real focus on ‘fairness’ in the system design, as opposed to revenue-building, so we need to be careful that any tax changes are for the right reasons and are backed by a clear, practical and sustainable business case. We currently have a fairly simple and efficient tax system that should be kept and better enforced, with changes to specific rules where needed."

Despite concern around some of the proposed changes, Ms Watson says the level of consultation around the proposed changes is a positive sign.

"There has been considerable engagement on this issue, with submissions in the thousands from New Zealanders including iwi, businesses and unions.

"While these have highlighted the challenges and opportunities for the tax system, they also reinforce that tax is a big issue with significant reach into - and implications for - every part of our community.

"We will continue to advocate on behalf of our local business community on this issue and look forward to hearing the response from Government in April."

To explain what this Report and the proposed changes mean for local business, The Chamber will be hosting Expert Update: 2019 Tax Report on 28 March, with Dr Deborah Russell - MP and tax expert, and Kirk Hope - Chief Executive of BusinessNZ and member of the Tax Working Group.

ENDS


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Whether We’re Punching Above Our Weight, And Should We Care?

According to Pierre De Coubertin, founder of the modern Olympic Games, the Olympic ideal was not about “winning, but fighting well. Life is not conquering, but fighting well.” True to that ideal, young people from all over the world do still congregate together once every four years to compete peacefully against each other... More>>



 
 


Finance: Finance Minister And RBNZ Governor Agree To Update MOU On Macro-prudential Policy

Finance Minister Grant Robertson and Reserve Bank Governor Adrian Orr have updated the Memorandum of Understanding (MoU) on macro-prudential policy to further protect the financial system and support the Government’s housing objectives... More>>

Government: Offers Formal Apology For Dawn Raids
Prime Minister Jacinda Ardern has today formally apologised to Pacific communities impacted by the Dawn Raids in the 1970s.

Between 1974 and 1976, a series of rigorous immigration policies were carried out that resulted in targeted raids on the homes of Pacific families... More>>


Government: Bill Introduced To Protect Against Conversion Practices

Legislation has been introduced to Parliament to protect against practices intended to change or suppress someone’s sexual orientation, gender identity, or gender expression... More>>

ALSO:




Human Rights Commission: Successive Governments Responsible For Massive Breaches Of The Right To A Decent Home

Te Kahu Tika Tangata / Human Rights Commission has today launched Framework Guidelines on the Right to a Decent Home in Aotearoa and announced that it will hold a national inquiry into housing... More>>



NZUS Council: Welcomes Nomination Of Senator Tom Udall As US Ambassador To NZ

The NZUS Council welcomes the nomination of Senator Tom Udall to the role of US Ambassador to New Zealand and Samoa, NZUS Council executive director Jordan Small said... More>>

BusinessNZ: Visa Extensions Welcomed
BusinessNZ has welcomed the extension of some critical skill visa durations and changes to immigration systems to speed processing. Chief Executive Kirk Hope says move acknowledges advocacy by the hospitality sector, the BusinessNZ Network and others, and comes not a moment too soon.... More>>

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels