Tax proposals to govt next week
Long awaited proposals arising from last year’s discussion document on how investments are taxed are to go to ministers next week.
Thursday, January 26th 2006, 6:58AM
by Rob Hosking
The options rise from the discussion document on taxation of investment income, which has been chewed over by the industry and officials since June last year.
It is not known when ministers will release the results of what officials advise them but both ministers have spoken of the need to expedite the issue.
Abolition of capital gains tax on local investments seems likely to get the go-ahead with little difficulty: abolition of the “grey list” exemption for offshore investments still looks problematic for the government.
However, Cullen says he wants all the changes implemented together, and a number of parts of the change are crucial for the KiwiSaver workplace savings scheme. He also, just before Christmas, reiterated his commitment to removing the grey list.
That scheme is due to start in April this year, meaning any tax changes, if they are to be implemented in an orderly fashion, will have to be introduced by Parliament by the middle of the year.
The tax area is only one that has been the focus of a lot of work by officials over the break. Officials are also looking at the cross-border mobility of superannuation schemes.
Making it easier for New Zealanders in Australia and who have built up a nice nest egg under the Australian compulsory superannuation regime to bring their savings home.
The issue is also seen as significant for the development of KiwiSaver: not only for New Zealanders returning home, but for young New Zealanders who might plan to work overseas for a few years. The idea is that instead of putting off starting saving until they return, making such schemes more mobile will make it attractive for people to start them before they go overseas.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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