Articles by Matthew Gilligan
In recent times the Tax Working Group reviewing New Zealand's tax system has received increased attention.
This is no surprise as it gets closer to making its recommendations, which now appear likely to come out early in the New Year. The Tax Working Group is a collection of academic, government and industry tax professionals charged with reviewing New Zealand's tax system.
Part of their brief is to look at the equity and fairness of the system and look for ways to broaden the tax base, ideally so as to fund drops in the personal, trust and corporate tax rates.
Many readers will be aware of some of the options they are considering in respect of the taxation of property including capital gains tax, a land tax and a tax focused on property investments (which imposes a deemed income based on a risk free rate of return). My thoughts on this process are as follows:
I think that stamp duty should be considered. It is progressive in nature (taxes volume) so satisfies the fairness and equity requirement. It is also a system that is relatively easy to legislate for, hard to avoid, and easy to enforce. I
If targeting the property sector and reducing the risks of a speculative bubble are a goal, then stamp duty on land transactions would also seem to achieve these goals. It dampens speculation (taking the margin off traders, leaving only the long term investors to prevail).
In the meantime we wait with baited breath as to what the next move is. Naturally GRA will keep you abreast of developments. I
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