Tax suggestions: 'I sigh deeply'

The group presented its final report on Thursday.

Some of the key changes proposed were:

• A capital gains tax on all investment assets, except the family home. This would be charged as gains were realised, except for managed funds, where capital gains tax on Australasian shares would be charged on an accrual basis.
• Increasing the amount of income that can be earnt on the 10.5% tax rate to $20,000 or $22,500 - or to $30,000 if the next tax rate was increased to 21% from 17.5%.
• Reducing the KiwiSaver PIE tax rate for low-income earners by five percentage points.
• Allowing earners on up to $48,000 a year a refund of the tax paid on their employer's KiwiSaver contributions. A refund on a sliding scale for those earning between $48,000 and $70,000.
• Increasing the member tax credit for KiwiSaver from 50c in every $1 saved to 75c, still to a maximum $520.

Finance Minister Grant Robertson and Revenue Minister Stuart Nash said the Government was not bound to accept all the recommendations it put forward. There were options to accept some, and/or to phase or sequence aspects of the packages proposed by the group. Both Ministers said it was highly unlikely all recommendations would need to be implemented.

“We will seek technical advice on addressing the unfair and unbalanced elements identified by the TWG and make further announcements in April on any measures to enhance the fairness and integrity of the tax system,” Nash said.