When it comes to a capital gains tax, very few New Zealanders will be bystanders, Wairarapa MP Alastair Scott says.
"The Government's Tax Working Group's recommendations reach deep into our lives for a bigger clip of the ticket," he said.
"It would do that by imposing one of the highest rates of Capital Gains Tax in the world, allowing the Government to reap $8.3 billion extra in its first five years from ordinary Kiwis. Very little escapes its net - small business owners, farmers, investors, bach and lifestyle owners would all be hit. It's also going to impact every single New Zealander with a KiwiSaver account. Kiwisaver will be taxed."
However, head of the Tax Working Group, Sir Michael Cullen, has stated that the Government will not adopt a CGT that would leave KiwiSavers worse off.
Cullen said last week if all of the group's KiwiSaver proposals were adopted KiwiSaver members earning more than $70,000 would, as a group, be better off.
"While some individual KiwiSavers might not be fully compensated by the group's measures, for the most part, KiwiSavers would most definitely be better off," he said.
Scott said it's misleading to claim that only the wealthy will pay a capital gains tax.
"In reality, it is the wealthy who can afford good accountants, can move their investments offshore and will concoct methods and find loopholes to enable the tax to be minimised or eliminated," he said. "But it's the small business owner, your local plumber or hairdresser, who can't afford expensive lawyers and who will end up paying the tax. It is middle New Zealand who will be hit the hardest."
You don't have to be rich to live on a lifestyle block, with more than 400,000 properties in New Zealand which are over 45 square metres and only around 50,000 of those are farms, Scott said.
"This means we have a massive proportion of lifestyle blocks, especially in our electorate. According to the capital gains tax recommendations, these lifestyle blocks will now have any growth taxed by a third," Scott said.
