Source: Radio New Zealand
123RF
The failure of the economy to fire up means New Zealanders will spend five fewer days paying tax this year.
Business advisory network Baker Tilly Staples Rodway estimated the total tax take rose 1.9 percent on last year, which meant New Zealanders would spend just 130 days paying tax this year, five days less than last year.
Tax Freedom Day, which was the hypothetical date New Zealanders would have paid their tax bill for the year, was expected to take place on 10 May, meaning whatever they earn after that date was theirs.
Baker Tilly Staples Rodway tax director Michael Rudd said the reason for the shorter forecast date was because this year’s tax increase was far less than last year’s increase of 3.9 percent, or 15.6 percent in 2022, when the economy grew 4-point-3 percent.
A flat corporate tax take of 1.2 percent indicated businesses were struggling to grow, with inflation outpacing GST revenues and a sugar rush of trust dividend payments drying up.
“An optimist might say that corporates are managing their tax payments to take advantage of the new Investment Boost regime, which provides a 20 percent year-one tax deduction for new business assets purchased after May 2025,” Rudd said.
However, he said a large increase in the number of business liquidations was probably having a bigger influence.
“The cost of those failures is often borne by suppliers who never get paid, affecting their bottom line.”
In contrast, Rudd said Australians were paying three days more tax this year, not five days less.
However, they celebrated their Tax Freedom Day three weeks ago, which was fairly typical.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand