In its latest Budget, the New Zealand Treasury has forecast economic growth will average 3% per year over the next five years, while annual average earnings will rise to NZ$71,000 (US$49,114) by 2022.
The government also hopes to obtain an extra NZ$726 million (US$502 million) over four years by making the tax system fairer and cracking down on tax dodgers, according to the Inland Revenue. The aim is to pump the money raised into public services.
The 2018 budget will provide the Revenue with NZ$31.3 million (US$21.7 million) in operating expenditure over the next four years, which includes NZ$23.5 million (US$16.3 million) to ensure that outstanding company tax returns are filed. Such activity is expected to recover about NZ$183.3 million (US$126.8 million).
The Budget also provides for NZ$3 million (US$2 million) in operating funding over the next four years to analyse how tax compliance could be improved in specific industries by means of third-party reporting and withholding taxes.
Revenue minister Stuart Nash told the New Zealand Herald: "Recently announced initiatives to reduce distortion in the tax system and boost productivity will also provide more revenue. Ring-fencing rental losses will mean speculators and investors can no longer offset tax losses from residential properties against other income to reduce their tax liabilities."
It is hoped the move will boost state coffers by at least NZ$325 million (US$225 million) over four years, while also further dampening property speculation and encouraging investment in the productive economy, he added.
Meanwhile, offshore suppliers of low-value goods will be required to register for, collect and return money relating to the goods and services tax (GST) in the same way that retailers currently do now. Estimates are that the move will generate NZ$218 million (US$151 million) in new revenue over the next four years, a sum that is expected to increase each year as online shopping continues to grow.
"This government’s plan includes adequately funding health, education and housing, increasing police numbers, and lifting more children out of poverty. We are not changing tax rates," said Nash. "But we do need a tax system that is simple, balanced and fair – where people and businesses comply with their obligations, and where those in similar circumstances pay the same amount."
A Tax Working Group has also been tasked with making recommendations for a fairer and more balanced tax system. It is scheduled to report back in early 2019.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
In its latest Budget, the New Zealand Treasury has forecast economic growth will average 3% per year over the next five years, while annual average earnings will rise to NZ$71,000 (US$49,114) by 2022.
The government also hopes to obtain an extra NZ$726 million (US$502 million) over four years by making the tax system fairer and cracking down on tax dodgers, according to the Inland Revenue. The aim is to pump the money raised into public services.
The 2018 budget will provide the Revenue with NZ$31.3 million (US$21.7 million) in operating expenditure over the next four years, which includes NZ$23.5 million (US$16.3 million) to ensure that outstanding company tax returns are filed. Such activity is expected to recover about NZ$183.3 million (US$126.8 million).
The Budget also provides for NZ$3 million (US$2 million) in operating funding over the next four years to analyse how tax compliance could be improved in specific industries by means of third-party reporting and withholding taxes.
Revenue minister Stuart Nash told the New Zealand Herald: "Recently announced initiatives to reduce distortion in the tax system and boost productivity will also provide more revenue. Ring-fencing rental losses will mean speculators and investors can no longer offset tax losses from residential properties against other income to reduce their tax liabilities."
It is hoped the move will boost state coffers by at least NZ$325 million (US$225 million) over four years, while also further dampening property speculation and encouraging investment in the productive economy, he added.
Meanwhile, offshore suppliers of low-value goods will be required to register for, collect and return money relating to the goods and services tax (GST) in the same way that retailers currently do now. Estimates are that the move will generate NZ$218 million (US$151 million) in new revenue over the next four years, a sum that is expected to increase each year as online shopping continues to grow.
"This government’s plan includes adequately funding health, education and housing, increasing police numbers, and lifting more children out of poverty. We are not changing tax rates," said Nash. "But we do need a tax system that is simple, balanced and fair – where people and businesses comply with their obligations, and where those in similar circumstances pay the same amount."
A Tax Working Group has also been tasked with making recommendations for a fairer and more balanced tax system. It is scheduled to report back in early 2019.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
