Tax Changes Will Boost Kiwisaver Savings
April 23, 2014 New Zealand Taxation
New Zealanders support the idea of dropping tax credits on Kiwisaver, in favor of reducing the overall tax burden on retirement savings.
On April 22nd the Financial Services Council released a new statement with the result of a new survey of New Zealanders on their opinions towards taxation of KiwiSaver, showing that a large number of people support the removal of the member tax credit in order to reduce tax rates applicable to retirement savings.
According to the Financial Service Council, if KiwiSaver became mandatory for all New Zealanders, the NZD 521 annual tax credit could be abolished entirely, and the savings were used to directly reduce the tax rates applied to KiwiSaver earnings, then an average New Zealander could cut their Kiwisaver contributions by as much as NZD 164 000 over 40 years, while reducing the impact of taxes on their funds by as much as NZD 288 000 when they retire.
The results of the Council’s survey showed that 49 percent of all respondents supported the described change, while only 11.5 percent opposed it.
By: Alan Cleaver