Terms of Reference for Tax Working Group announced
In accordance with its 100 day plan, the Government has today released details of the Terms of Reference for its Tax Working Group to be chaired by Sir Michael Cullen.
The Working Group has a broad mandate to look at New Zealand’s tax system. However, in addition particular issues have been identified for review. The Working Group will be required to report general to the Government on:
- Whether the tax system operates fairly in relation to taxpayers, income, assets and wealth
- Whether the tax system promotes the right balance between supporting the productive economy and the speculative economy
- Whether there are changes to the tax system which would make it more fair, balanced and efficient, and
- Whether there are other changes which would support the integrity of the income tax system, having regard to the interaction of the systems for taxing companies, trusts, and individuals.
In examining the points above, particular consideration must be given to:
- The economic environment that will apply over the next 5-10 years, taking into account demographic change, and the impact of changes in technology and employment practices, and how these are driving different business models,
- Whether a system of taxing capital gains or land (not applying to the family home or the land under it), or other housing tax measures, would improve the tax system.
- Whether a progressive company tax (with a lower rate for small companies) would improve the tax system and the business environment, and
- What role the taxation system can play in delivering positive environmental and ecological outcomes, especially over the longer term.
Members of the Working Group will be appointed before Christmas, and must include an independent advisor. The first meeting must occur no later than February 2018 with an interim report to the Minister of Finance and Minister of Revenue expected no later than September 2018. The final report is currently scheduled to be provided no later than February 2019. However, it has been made clear that no significant changes will be implemented until the 2021 tax year. The Terms of Reference also clarify that inheritance tax and changes to the income tax and GST rates are not on the table for review.
For further information please contact Andrew Oh.
Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.