Asset Sale Wont Lead to Tax Hike

June 21, 2012 New Zealand Taxation

Peter DunneRecent tax changes implemented by the government will cover any loss of revenue arising from asset sales and will reduce the chance that the government will need to raise taxes in the near future.

On June 20th the New Zealand Minister of Revenue Peter Dunne addressed the Parliament’s finance and expenditure committee, saying that recent actions taken by the government will raise enough revenues to cover all the losses which are expected to arise from the currently proposed sale of state owned assets.

According to the Minister, in last month’s budget the government introduced new measures to tighten down on tax evasions, closed several tax loopholes, and increased excise taxes on tobacco and petrol. He claimed that the new measures will jointly raise tax revenues by NZD 1.73 billion over the next five years.

He suggested that the new funds will be adequate to cover the NZD 94 million shortfall that the government currently expects see from the partial sale of MightyRiverPower, Genesis Energy, Meridian Energy and Solid Energy.

The Minister said that since the potential revenue losses from the asset sales was already covered there is a lower “… the likelihood of there needing to be tax increases”.

Photo by Tertiary Education Union (NZTEU)