Any changes to the tax system should have equity and fairness and achieve a balance between the desired level of compliance and cost of enforcements, said Financial Advice New Zealand in response to the Tax Working Group recommendations, released today.

“The tax system today plays a positive role in New Zealand society and should be reviewed and refined as New Zealander's needs evolve. It should yield enough resources for the government to perform its increasing welfare and developmental activities,” says Katrina Shanks, CEO of Financial Advice New Zealand.

“We of course support a progressive tax system that reduces economic inequalities. We welcome the recommendation that taxes on KiwiSaver be reduced – as a pivotal saving tool for New Zealanders, we need to do all possible to nurture growth in KiwiSaver participation.”

“However, there are concerns regarding the Capital Gains Tax (CGT) recommendations made by the Tax Working Group: many middle income New Zealanders have worked hard for their financial security through property investment and business ownership. Obviously there needs to be more work performed in areas such as the setting of the CGT as the individual’s marginal income-tax rate.”

“If adopted the CGT will have a significant impact on a broad spectrum of the middle New Zealand: farmers, builders, mum and dad property investors, business owners and many more. Seeking financial advice is important, particularly should the proposed CGT changes be adopted. Our recommendation to any who are concerned would be to seek financial advice before making any potentially rash decisions.”

© Scoop Media