NZ tax system unsustainable, says expert group

The Government's tax working group says the current tax system is unsustainable, and it needs a broader base.

The group had a full day meeting earlier this month ahead of a public tax conference to be held next week.

Among scenarios considered at the latest session were changes to align the top personal, corporate, and trust rates, along with options where those rates were not aligned, a summary from the session said.

Each of those systems was combined with base broadening options, including extensions of capital income taxation, land taxes, changed to taxation of investment property, and changes to the rate of GST.

Next week's conference and the working group's report - likely to be released early next year - would discuss the role of the tax system and principles for reform, and include a range of scenarios.

The group's preferred options for reform would be finalised following the conference, the summary said.

"It agreed, however, that New Zealand's current tax system is not sustainable as there are major growth, fairness and integrity issues.

"There was also agreement that the principle of a broad-based low-rate tax system should be maintained and that base broadening was required," the summary said.

"Consideration needed to be given to changing and extending the taxation of capital to make it more consistent and principled across the capital base."

- NZPA