Capital Gains Tax Argued Again
August 10, 2009 New Zealand Taxation
The debate of capital gains tax has yet again been brought forward for New Zealand.
Craig Elliffe, Auckland University tax policy and law professor, has brought forward the proposal that Government should implement a capital gains tax system. This comes as a counter-action to the proposal from the government established taxation working group which has recently endorsed the raising of Goods and Service Tax (GST) from 12.5% to 15%.
Craig Elliffe criticized the nature of GST, under which those on a lower income would proportionally be spending more on GST than those on higher incomes. The proposal of raising GST is thought to be able to raise an extra NZ$2 billion in revenue, which could then be used to cut personal taxes. Craig Elliffe stated that the equivalent VAT tax in the United Kingdon, and its lowering in December saw a retail turn over increase of £2.1 billion increase, and that if compared to the US a capital gains tax will see NZ$1.36 billion in tax revenues.
While the Government has stated negative opinions of Capital Gains Tax, Peter Conway, Council of Trade Unions secretary, has stated that “despite the government apparently ruling it out, there is probably a better chance for such a tax than ever before”.