Bed Tax Could be on the Way

December 18, 2014 New Zealand Taxation

The Prime Minister has voiced his support of a bed tax, but the Treasury claims that it would set a damaging precedent.

While at a function in Queenstown on December 17th the Prime Minister John Key indicated that he supports the proposal to implement a bed tax in the city in order to pay for local infrastructure.

He explained that the reasoning behind the proposal “…is that you’ve got a small rating base, you’ve got a million-odd people that pour in here every year, you’ve got a huge amount of demand on resources, and why the hell should ratepayers have to pay for it?”

He added such a tax would be set at a small rate, which would be unlikely to deter tourists from coming to the city.

However, the New Zealand Treasury has previously voiced its opinion on the proposal, claiming that if one tourist city implements such a tax, it would set up precedent for other cities to demand the same right.

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