Calls Raised For KiwiSaver Tax Change
July 31, 2014 New Zealand Taxation
New Zealanders could retire with as much as NZD 100 000 more in their pocket, if newly suggested tax changes are made.
On June 30th the Taxpayers’ Union, the Financial Services Council, Age Concern and Consumer New Zealand launched a collaborative campaign calling on the government to reduce the tax burdens paid by New Zealanders on their long-term savings.
The campaign revolves around a call to reduce the taxes applicable on interest income from term-deposits, and from KiwiSaver funds.
According to a statement by the Taxpayers’ Union, term deposits should only be taxed on the interest rate above inflation, as growth in line with inflation should not be considered as an economic income.
The campaign also called for the “…effective tax rate paid on KiwiSaver funds to be the same as the marginal income tax rates KiwiSavers would pay on their other income.”
It is estimated that if the changes to KiwiSaver were instituted, an average person in New Zealand who saves 6 percent over a period of 40 years may see their final savings amount increase by as much as NZD 100 000.
Photo By: r. nial bradshaw