INDEPENDENT NEWS

BERL strongly affirms robustness of its CGT calculations

Published: Tue 16 Sep 2014 02:08 PM
15 September 2014
Note to media – for immediate release
BERL strongly affirms robustness of its CGT calculations
http://www.berl.co.nz/economic-insights/macro-picture/government-and-fiscal-policy/berl-strongly-affirms-robustness-of-its-cgt-calculations/
This note is to state for the record that BERL strongly affirms the robustness of the Capital Gains Tax (CGT) calculations provided in 2011 to the Labour Party.
In addition, BERL equally strongly refutes the implications contained in the NZIER June 2014 report that our calculations heavily overstated the revenues arising from a CGT.
Further, we caution those relying on calculations contained in the NZIER June 2014 report, in particular Federated Farmers who commissioned that report. Those calculations should be used with the utmost care as there remain unexplained discrepancies and a worrying lack of clarity as to the methods and data sources used.
For example, there is no explanation as to why the implied CGT tax base for individual investment property is wildly below the tax base calculated by Treasury and IRD for the 2009 Tax Working Group. In particular, the NZIER calculations imply a tax base for this element of the CGT of approximately $33bn for 20121, when the Tax Working Group estimated a base of $120.3bn2 for the 2009 year.
BERL has been unable to obtain a satisfactory clarification from NZIER as to this glaring discrepancy, nor the overall method adopted for their estimates, nor the data sources used.
< ends >
1 From the $1.7bn estimate of revenue noted on page 7 of their report, divided by 0.052 (equivalent to the assumed rate of capital appreciation of 5.2%).
2 Noting this is further consistent with the stated estimate of the value of the overall housing stock of $568bn.

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media