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Tax Working Group

Tax Working Group

Coverage of the TWG and our views on the recommendations.

Coverage of the TWG and our views on the recommendations.

In December 2017 the New Zealand Government established the Tax Working Group (TWG), an advisory body, to consider ways to make the taxation system ‘fair’ and ‘balanced’. The TWG’s Final Report was released on 21 February 2019, containing 99 recommendations, including whether NZ should adopt a general capital gains tax.

A majority of the TWG consider that a capital gains tax on most assets (including shares, land other than the family home, and business assets) is warranted on fairness grounds. It expects that this will produce a better result in terms of taxing those on the same income at the same amount, providing an opportunity to make the system more progressive and fairer as it allows the tax base to be modified for business and investors. A minority consider that a more limited application to residential investment properties only is warranted, on efficiency and compliance cost grounds.

The Report also contains illustrative packages to ‘recycle’ revenue collected from a capital gains tax, as well as recommended changes to other areas of the tax system (such as environmental, savings and business tax settings).

Whatever your views on the various recommendations, the work of the TWG is valuable and important and should be acknowledged. Its work is likely to have a longer term impact as well as the immediate conversation that has been started.  

We now await the Government’s response, due in April. In the meantime, the TWG’s 99 recommendations remain “not out”. Our dedicated webpage features full coverage of the TWG process, and our views, to date.

We would be pleased to discuss the TWG Report and recommendations with you.

 

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