PM rules out Dunne's tax on laptops

Mr Key said the laptop tax was "a nice idea when it comes to tax policy, but a pain in the neck for everyone that has to put up with it". Photo / Claire Trevett

Revenue Minister and United Future leader Peter Dunne suffered a second setback less than 24 hours after his carpark tax was dumped, when Prime Minister John Key all but ruled out his proposed "iPad tax" on work smartphones, laptops and tablets.

But Mr Dunne dismissed Opposition attempts to use his political embarrassment to drive a wedge between him and Mr Key.

Mr Dunne early yesterday acknowledged an IRD proposal to tax employer-funded payments for workers' calling and data plans on smartphones and also on home broadband services had the potential to stir up more vigorous opposition than that which sank his carpark tax proposal.

But on his way into Parliament yesterday, Mr Key effectively nipped the tax in the bud.

"I think there's virtually no chance of it going ahead," he told reporters.

Mr Key said the laptop tax was "a nice idea when it comes to tax policy, but a pain in the neck for everyone that has to put up with it".

Mr Dunne and the IRD were currently going through submissions on the proposed "iPad tax".

"My understanding is he's had a read of them and he doesn't look very optimistic to me and neither am I," Mr Key said.

In response to questions from Labour's revenue spokesman, David Cunliffe, Mr Dunne said he would not be recommending the tax unless he was persuaded that there were considerable gains to be made.

"I think that's highly unlikely but let's see what the process throwsup."