CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. New Zealand Mulls Savings Tax Reforms

New Zealand Mulls Savings Tax Reforms

by Mary Swire,, Hong Kong

22 November 2010

In a recent conference address, New Zealand’s Revenue Minister Peter Dunne pointed out that, following the last budget’s tax reforms, including lowering personal and corporate taxes and increasing the goods and services tax rate, the government was now looking to introduce measures to promote savings and investment.

He confirmed that the Savings Working Group (SWG), set up in August this year, is looking at all issues involved in order to improve New Zealand’s savings track record, and reduce the country’s “unsustainable reliance on credit”, particularly on offshore borrowing to fund both investment and consumption.

When establishing the SWG, the Finance Minister Bill English said that the only exclusions in its wide-ranging brief are changes to superannuation and the broad taxation of capital gains or land, both of which the government had previously ruled out.

More specifically, Dunne said, the SWG is looking at whether the tax system should be indexed for inflation to reduce tax biases between different forms of saving; and “whether certain forms of capital income, such as interest, should only be partially taxed as was suggested in the Henry Review in Australia to offset the way in which inflation can lead to this income being overtaxed.”

The SWG will also consider whether New Zealand should adopt a Nordic tax system with a low flat tax rate on capital and higher progressive rates only on labour income; whether or not taxes on profits accumulating in retirement savings accounts should be taxed; and whether or not the current capped tax rate for portfolio investment entities should be removed, or extended to other forms of passive investment income.

“At the same time,” he added, “it is crucial that any changes in this area are responsible and fiscally affordable. New Zealand's low level of public debt has been important in sustaining New Zealand through the recent great financial crisis.”

The SWG is to recommend policy options in January next year.

TAGS: tax | investment | pensions | financial services | retirement | investment funds | budget | New Zealand | tax reform | services

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »