Tax Justice Aotearoa has welcomed the release of Inland Revenue’s draft Long Term Insight Briefing, which looks at the possible future directions for New Zealand’s tax system.
The discussion document suggests a stable core structure of main bases that “comprehensively taxes the factors that are sought to be taxed”, coupled with the ability to “change rates on main bases to change the level of revenue.”
“We welcome the release of the draft LTIB as a useful contribution to the debate about what kind of tax system we want for the future,” says Glenn Barclay, Chair of Tax Justice Aotearoa.
“Tax has become a hot topic and this document demonstrates some of the challenges we face.”
“We look forward to hearing more from the IR officials and giving the public the opportunity to question their thinking at our upcoming briefing event*,” says Glenn Barclay. “This is part of the consultation process so everyone who would like to make a submission on the LTIB should come along.”
The LTIB notes the fiscal challenge we face as a country as expenditure increases, largely as a result of an ageing population.
“Tax Justice Aotearoa agrees with this observation but an ageing population is just one of the many problems we have stored up for ourselves by failing to invest in both social and physical infrastructure – the challenges of poverty and inequality, as well as climate change adaptation and mitigation also come to mind”, says Glenn Barclay.
The LTIB also demonstrates that New Zealand is an outlier in the extent to which it relies on tax revenue from labour income and GST and that we under tax capital income.
“These are the taxes that impact most on working people and the poor,” says Glenn Barclay.
“We need to address this imbalance by ensuring those who can afford to pay more are required to do so, and also that the regressive nature of GST can be addressed. The permanent GST-offset credit suggested by the LTIB, is a proposal worth considering.”
“There are limitations to the document, for example it does not address the interface between the tax system and the Working For Families tax credit, which is a fraught issue for those who are dependent upon WFF, but we look forward to the debate that the document will provoke,” says Glenn Barclay.
* Tax Justice Aotearoa will be hosting speakers from Inland Revenue at one of its ‘Tax on Tuesdays’ events on Tuesday 1 July at 12.30pm* – members of the public are welcome to attend.
It will be a hybrid event with an in person session at Rutherford House in Wellington, which will be live-streamed.
Where: Rutherford House Lecture Theatre 2 (RHLT2), 33 Bunny Street, Wellington.
When: 12.30-1.30 pm Tuesday, 1 July 2025
To register in person or Zoom: https://www.tjanz.org/ir-insights-briefing
