Auckland, 21 February 2019

Tax report challenges political parties to take non-partisan approach says CPAs

The Tax Working Group today delivered an important report that will serve to inform governments and policymakers well in future, says the representative body for more than 2,000 accountants.

Paul Drum, Head of External Affairs at CPA Australia, says the Group’s report clearly sets out the tax challenges facing the present administration and future governments and the opportunity for all political parties to cogently formulate their tax policies ahead of next year’s election.

“While much of the immediate focus will be on the capital gains recommendations, it is important to note that the Tax Working Group has made around 100 recommendations on a full suite of other issues in its report,” Drum says. I think it clearly lays down the challenge to all political parties to take a non-partisan approach and to do what is best for New Zealanders and our country.”

“This is a very significant piece of work and the working group members are to be commended for recognising the need to change and broaden the tax mix in order to future-proof New Zealand’s economy against upcoming external and internal shocks, including the ageing population,” he says.

“Our tax base is too narrow and too reliant on three taxes – personal income, GST and company tax – and the Group clearly recommends broadening tax revenue sources,” he says.

New Zealand is an outlier amongst developed nations in lacking a capital gains tax, one of the recommendations of the report, notes Drum.

“In our submission, we clearly stated the most appropriate vehicle for broadening the tax base is via a broader based capital gains tax,” he says.

The question of whether it will be introduced - and to what assets such a tax would apply - is a decision for the future Parliament, informed by the reaction of the electorate to any such policy, he says.

Drum also noted that tax reform was a vexed political issue, which had side-lined many past cogent proposals for reform both here and in overseas jurisdictions.

ENDS

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