- Taxation in New Zealand
Taxation in New Zealand is collected at a national level by the Inland Revenue Department (IRD) on behalf of the
Government of New Zealand. National taxes are levied on personal and business income, as well as on the supply of goods and services. There is no capital gains tax, although certain "gains" such as profits on the sale of patent rights are deemed to be income. Local property taxes (rates) are managed and collected by councils. Some goods and services carry a specific tax, referred to as an excise or a duty eg Alcohol excise or gaming duty. These are collected by a range of government agencies such as the New Zealand Customs Service.
New Zealand went through a major programme of
tax reformin the 1980s. The top marginal rate of income tax was reduced from 66% to 33% (since increased to 39% in April 2000) and corporate income tax rate from 48% to 33% (reduced to 30% in 2008). Goods and services tax was introduced, initially at a rate of 10% (now 12.5%). An OECDreport in 2001 described the New Zealand tax system as one of the most neutral and efficient within its membership.http://www.oecd.org/dataoecd/29/27/1891375.pdf The tax system in New Zealand: An appraisal and options for change ]
Tax reform continues in New Zealand with key issues being:
*business taxes and the effect on productivity and competitiveness of NZ companies [http://www.taxpolicy.ird.govt.nz/publications/files/BTR2006.pdf NZ Government discussion document on business taxes]
*differences in the treatment of various types of investment income [http://www.taxpolicy.ird.govt.nz/publications/files/html/invincome/index.html NZ Government discussion document on taxation of investment income]
*international tax rules [http://www.taxpolicy.ird.govt.nz/index.php?view=461 NZ Government media release on forthcoming international tax review]
Individual income tax
New Zealand residents are liable for tax on their worldwide
taxable income. In 2005-06, 43% of the New Zealand Government's core revenue ($22.9bn) came from individuals' income taxes.http://www.treasury.govt.nz/budget2005/taxpayers/ Key facts for taxpayers from the NZ Treasury website]
Types of taxable income
*business and self-employed income
investments( interest, dividendsetc...)
*overseas income (including income from an overseas
Income tax varies dependent on income levels in any specific tax year (personal tax years run from 1 April to 31 March).
There are also excise duties on tobacco products, with a rate of $294.62 per thousand cigarettes, and $368.72 per kilo of tobacco, on other tobacco products.
The excise duties on fuel are 42.524c per litre (plus 8c per gram of lead) on motor fuel, 30.2c per litre on Menthol and 10.4c per litre on Liquified petroleum gas. Compressed natural gas has an excise of $3.17 per gigajoule.
Laffer curveand the optimal tax rate argument
* [http://www.treasury.govt.nz/ Treasury homepage]
* [http://www.ird.govt.nz Inland Revenue Department homepage]
* [http://www.taxpolicy.ird.govt.nz/ Inland Revenue, Policy Advice Division]
* [http://www.acc.co.nz The Accident Compensation Corporation homepage]
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