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New Zealand's Tax Burden Is Too High Warns Business Group

by Mary Swire, Tax-New.com, Hong Kong

19 December 2003


Business NZ, a leading New Zealand business promotional organisation, is urging the government to relieve the tax burden on firms and individuals, warning that the country risks becoming uncompetitive within the global economy.

Simon Carlaw, Chief Executive of Business NZ believes tax cuts are well within the government's means. "Core Crown revenue is expected to remain around 34% of GDP for the next five years, well above Business NZ's recommended target of 30%. The operating balance is likely to be between 3-4% of GDP over the same period - that's a large and sustained surplus,” he argues.

“Our 33% corporate tax rate is already very uncompetitive against Australia’s (30% and soon to be lower still) corporate tax rate,” warns Carlaw. “Similarly, our 39% top rate of personal tax kicks in at a very low threshold by international standards, giving New Zealanders, including many small businesses, a heavier tax burden than most.”

“Recent petrol tax and border security fee announcements show that taxation is generally and steadily increasing, not decreasing - the opposite of what is happening elsewhere in the OECD,” observes Carlaw.


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