Tax changes have to fit with other policies
Any changes to how savings are taxed has to fit in with a number of immovable policy settings which are already part of the taxation regime, say Inland Revenue officials.
Thursday, March 17th 2005, 6:51AM
by Rob Hosking
Speaking on implementing the recommendations of the Craig Stobo report completed last year, senior IRD policy official David Carrigan told last week’s Super Funds conference that the tax simplification measures brought in from 1998 cannot be tinkered with.
Those changes mean the majority of taxpayers no longer have to submit a tax return. As well as saving taxpayers a huge amount of hassle, it saves the Inland Revenue Department tens of millions of dollars every year.
Any changes to the tax system have to avoid losing that. “That’s a big issue,” Carrigan says.
The Family Assistance regime, and the present government’s extension of it with the ‘Working For Families’ package also has to be taken into account.
“If the government goes ahead with the Workplace Savings Group proposals, and it wants to make it mandatory for employers to offer superannuation, clearly we have to make sure any new regime that comes in does not over-tax those investments.”
If the government goes ahead with the WSG proposals “that will probably mean a lot more low income earners will be entering the saving system, and some of them will be receiving family assistance.”
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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