Government response to the Tax Working Group recommendations

Most of the attention on the Government response to the recommendations from the Tax Working Group report was on the scrapping of plans for any new type of Capital Gains Tax. See CGT backdown, everyone claims victory.

But the report also covered a number of other tax changes.

Beehive:  Govt responds to Tax Working Group report

The Coalition Government today released its response to the recommendations of the independent Tax Working Group report.

The report found that on the whole New Zealand’s tax system was working well, but made a number of recommendations to improve fairness, balance and structure.

The Government is not adopting any of the recommendations on capital gains taxation and has agreed no further work is necessary on that aspect of the report.

Winston Peters said no, so Labour and the Greens agreed that their CGT plans were stuffed.

“The final report covered all aspects of the tax system, and a number of the recommendations will now be considered for inclusion in the Government’s Tax Policy Work Programme,” Grant Robertson said.

“That includes exploring options for targeting land speculation and land banking.

“We intend to direct the Productivity Commission to include vacant land taxes within its inquiry into local government funding and financing,” Grant Robertson said.

Exploring options? I thought that’s what the TWG was supposed to have done.  But now they are going on to exploring more and doing another inquiry. Given the supposed purpose of the TWG, this sounds like further kicking of the tax can down a dusty potholed road.

“Officials have been directed to prioritise work on the TWG’s recommendations on ways to encourage investment in significant infrastructure projects and improve the integrity of the tax system to crack down on tax dodgers,” Stuart Nash said.

A refreshed tax policy work programme will be released mid-year.

So yesterday they announced what they plan on announcing later in the year.

The Coalition Government reiterated it will not introduce resource rentals for water or a fertiliser tax in this term of Parliament.

Another Peters veto of Labour and Green plans?

Other priorities for the Government this year include progressing legislation for research and development tax incentives; GST on low-value goods from offshore suppliers; a discussion document on a digital services tax, and further work to ensure multinationals pay their fair share of tax.

On to a discussion document and further work on things that have been talked about for years.

Summary of the Government’s responses to the recommendations

In that summary there are a number of TWG recommendations flagged as “Endorse the TWG recommendation” – in just about every case the recommendation is not to change anything.

There are several recommendations flagged as “Consider as a high priority for work programme”, meaning no decision has been made on what to do.

What was this Government response for? It has done little but admit they were abandoning any CGT plans indefinitely.

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2 Comments

  1. Duker

     /  18th April 2019

    What do you mean: “Exploring options? I thought that’s what the TWG was supposed to have done. But now they are going on to exploring more and doing another inquiry. ”
    Clearly havent read the the TWG terms of reference
    https://taxworkinggroup.govt.nz/resources/terms-reference-tax-working-group

    Especially this part
    “The Working Group will be able to recommend further reviews be undertaken on specific issues which the group considers it has not been able to explore sufficiently, or that were excluded from its terms of reference but which could benefit from being considered in the context of its recommendations.”

    It was never a one stop shop.
    Nationals own Tax Working Group back in 2010 was mostly put on the shelf as well – except for increasing GST which Key lied about before the 2011 election

    Reply
  1. Government response to the Tax Working Group recommendations — Your NZ – NZ Conservative Coalition

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