New Zealand Needs a Tax Overhaul
January 14, 2013 New Zealand Taxation
New Zealand needs to take a step back and have a close look at the current tax code, before embarking on a fundamental overhaul of the tax system.
Grant Thornton, a partner at the taxation consultancy firm Greg Thompson, has heralded in the new year with a press release issued on January 14th, saying that the New Zealand tax code and tax administration systems need a complete overhaul.
According to Grant Thompson, over the years the New Zealand tax regulations have faced a succession of changes, updates and alterations, and now the entire tax legislation exceeds 3 000 pages in length.
The breadth and complexity of the tax code now means that the tax system is too complicated to be understood by an “ordinary Kiwi”, and “New Zealanders spend too much time, money, and aggravation understanding and complying with taxes .“
He describes the current state of the tax system as a “serious handbrake on the economy”.
In order to rectify the situation, the government needs to thoroughly examine and overhaul the entire tax system, starting from the Inland Revenue Department’s aging computer system, which was first launched in 1991.
Grant Thompson suggested that a upgraded tax administration infrastructure would allow New Zealand to “modernize the way it delivers tax and social policy services.“
He went on to say that New Zealand also needs to consider the steps and measures it will need to take once the country’s economic growth picks up, and needs to create “a plan for the role that tax will play in funding that growth, and ensuring it does not become and inhibitor to that growth.”
Photo by Philip Taylor PT