Govt needs more tax revenue sources: expert
‘‘THERE is always change, it never stays still.’’
Chartered Accountants Australia and New Zealand tax leader John Cuthbertson was referring to the New Zealand tax system.
Mr Cuthbertson gave a presentation at the Chartered Accountants Tax Roadshow which visited Dunedin and Cromwell this week.
The annual event was designed to discuss the most pressing tax topics affecting Chartered Accountants’ members.
This year’s roadshow discussed the new brightline rules and other changes to the tax system, such as new disclosure requirements for trusts which would come into effect next year.
Mr Cuthbertson, who is a chartered accountant, has been in the tax industry since 1991.
He has been with
Chartered
Accountants for five years and was previously a taxation director at PricewaterhouseCoopers for about 25 years.
As the population aged and a gig economy — where workers leave traditional employment in favour of working independently on a taskbytask basis for various employers — became more prominent, the country needed to look at different ways of raising revenue, he said.
While it could be considered New Zealand had a ‘‘broadbased’’ tax system he did not believe that.The country had three main tax sources — personal income tax, goods and services tax and corporate tax.
Other sources of tax revenue needed to be considered for the future sustainability of the system, he said.
‘‘I don’t think the system is in for an immediate shakeup but I do think it will change over time.’’
With an election next year, Mr Cuthbertson expected there would be discussion on the topic.
Revenue Minister David Parker recently announced the Government was developing a Tax Principles Act aimed at fairness in the tax system.
When the draft legislation was being developed, the Government needed to be careful in designing the framework for what fairness looked like.
‘‘That will be more subjective and open to manipulation . . . that is where there will be differences of opinion,’’ he said.
Chartered Accountants also wanted to see the ‘‘enshrinement’’ of the generic tax policy process into the Tax Principles Act which would ensure the legislation was still ‘‘workable and practical’’.
One of the other elements of a good system was compliance and administration costs.
‘‘For a tax system, you want it to be easy to comply with and difficult not to comply with,’’ he said.