Proposed Capital Gains Tax Dumped
Earlier today the Government released it’s response to the recommendations of the Tax Working Group (TWG). Most notably, the Government has announced it will not be adopting any of the TWG’s recommendations on capital gains taxation (CGT) and has agreed that no further work will be explored on CGT. The Government was unable to find a consensus on CGT and is of the view that many New Zealanders also do not endorse a CGT. The Government has however agreed to tighten rules around land speculation and to work on ways to counter land banking.
A consequence of the Government's decision not to adopt the CGT
recommendations is that no further work will be undertaken on the
personal income tax recommendations. This means the Government will
not undertake any further work on considering increasing the bottom
threshold of personal tax and will not reduce the top marginal tax
rate..
A refreshed tax policy work programme will be released mid-year. We
can expect it will touch on the o
ther priorities that the Government have announced which include
progressing legislation for research and development tax
incentives; GST on low-value goods from offshore suppliers; a
discussion document on a digital services tax, and further work to
ensure multinationals pay their fair share of tax.
A full list of the Governments responses to the TWG recommendations
can be found here -
http://taxpolicy.ird.govt.nz/news/2019-04-17-government-responds-twg-recommendations#statement