Report to spur tax submissions

By BRIAN FALLOW

A start-from-scratch review of the tax system yields its first fruits today with the release of an interim "issues" paper intended to stimulate and focus a new round of public submissions.

Finance Minister Michael Cullen has said the report will be more radical than most people are expecting.

If so, it will differ from most of the submissions made to the committee, which generally called for adjustments rather than root-and-branch changes to the tax system. But the review's terms of reference are broad.

It is free, for instance, to recommend the abolition of some forms of tax or the establishment of new ones, as well as looking at the mix of direct and indirect taxes, the progression of the income tax scale and the implications of globalisation.

The review committee, headed by Arthur Andersen's managing partner Robert McLeod, is due to make its final report by the end of September. The Government has said it will not introduce significant new taxes without first seeking a mandate at the general election.