24 October 2001 PR160 /01

FFNZ Supports Principled Stance on Taxation

The Tax Review team is to be congratulated for its principled approach and not shying away from contentious issues such as proposals to remove excise taxes on alcohol and tobacco says Federated Farmers of New Zealand (Inc) President Alistair Polson.

"The Federation endorses proposals to flatten the tax structure and align the top personal marginal tax rate with the company tax rate. It is important that New Zealand's tax rates are competitive given the international mobility of capital and labour. This would encourage investment, minimise tax avoidance, and reduce administrative cost burdens.

"The Federation would welcome an additional independent review of local government taxation (rates), which are highly inequitable and fly in the face of the sound principles associated with a good taxation system.

"Given the Government's commitment to signing the Kyoto Protocol the Review notes that Climate Change is likely to raise taxation issues that New Zealand must address. Essentially the Review is warning against the premature introduction of carbon taxes the effect of which would be to undermine New Zealand's international competitiveness.

"This is sensible given New Zealand's total green house gas emissions are 0.2% of the developed world's emissions and that developing countries such as India and China have no obligations under the Kyoto Protocol.

"New Zealand is the only party to the Kyoto Protocol looking at agricultural sector commitments to reducing green house gas emissions. The Review highlights that much more work needs to be undertaken before the Government can contemplate introducing carbon charges."

ENDS

For more information: Alistair Polson, PH 04 473 7269 or 025 370 085 John Pask, PH 04 473 7269

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