New Zealand

Details

  • Service: Tax
  • Type: Business and industry issue
  • Date: 2/02/2011

Taxmail - Savings Working Group report released 

Issue 1, February 2011

 

Overview

 

The Government today released the Savings Working Group (the “SWG”) report: Saving New Zealand: Reducing Vulnerabilities and Barriers to Growth and Prosperity”. It paints a fairly grim national savings picture in advocating for wide-ranging reform. The key issues are New Zealand’s high foreign liabilities and the accompanying vulnerability of the NZ economy.

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The report makes a number of recommendations aimed at increasing New Zealand’s total national savings to reduce this economic vulnerability, including a number of tax recommendations:

 

  • Inflation indexing interest income and expense.
  • Reductions to PIE tax rates to target an effective tax rate on savings of around 5 to 10% below investors’ marginal rates and extension of PIE tax rates to other types of savings income (e.g. dividends and interest).
  • Continuing the switch from income tax to GST (e.g. increasing the GST rate to 17.5% accompanied by compensating income tax and benefit changes).

 

The attached taxmail discusses the SWG recommendations in greater detail.

 

  

Paul Dunne

Partner – Tax

Auckland

Phone: +64 9 367 5991

E-mail: pfdunne@kpmg.co.nz

 

John Cantin Partner – Tax

Wellington

Phone: +64 4 816 4518

E-mail: jfcantin@kpmg.co.nz

 
Taxmail - Comment on topical tax issues from KPMG NZ Tax. 

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