20 April 2026 – Inland Revenue’s Long Term Insights Briefing on the future of New Zealand’s tax system has been welcomed as recognising the need for more government revenue, but it is short on meaningful solutions to solve the problem, says tax reform group Tax Justice Aotearoa (TJA).
“IRD draws attention to the fiscal challenges arising from an ageing population, but does not really come to grip with the many other factors that are going to require government intervention and expenditure in the coming years, such as climate change mitigation and response, our growing inequality and declining infrastructure and public services,” says Glenn Barclay, spokesperson for TJA.
“It is good that they recognise there is a real problem and that we need to grow government revenue, but we are concerned that the solutions they offer are limited and potentially regressive,” says Glenn Barclay.
“IRD appears to be arguing that existing tax bases (mainly GST and income tax) are not enough, but they also seem to be saying that adding a new base, such as a capital gains tax, is too difficult. We already rely too heavily on GST, which asks too much of ordinary working people, yet IRD seriously floats an increase in this tax as a way forward.”
While IRD says there are ways of making GST less regressive, through the use of rebates, TJA thinks there are better ways of doing this. TJA’s own Tax Policy Statement, which was released last week sets out a more thorough, equitable and progressive set of measures to address our fiscal challenges.
“Our Tax Policy Statement shows that a tax system that works for everyone in Aotearoa New Zealand is possible,” says Glenn Barclay. “We need to move away from our reliance on taxes that impact most on ordinary working people and ensure that the wealthy and big corporates are paying their fair share. While we welcome IRD’s contribution to the tax debate, they are not offering any real solutions for people in Aotearoa already struggling with the cost of living.”
TJA’s Tax Policy Statement sets out practical changes we can make to our tax system to catch-up with other developed countries’ investment in public goods, services and infrastructure, to tackle inequality and to support a more productive and resilient economy. The proposed changes would close the gaps in tax on big corporates and ensure the wealthiest are paying their fair share, and include:
Tax surcharge on big corporates, for example a levy on major banks (as in the UK and Australia), a surcharge on sectors managing vital infrastructure or where there is a lack of competition, like supermarkets and gentailers.
Excess/windfall profits taxes, for example, on big corporates to discourage price gouging and excessive profits arising from the current fossil fuel crisis.
Taxing Big Tech and other multinationals by enforcing existing tax obligations and changing the law to require these corporate giants to be more transparent about the profits they’re making, like the Public Country-by-Country Reporting adopted in Australia.
Close the shareholder loans tax loophole, to prevent tax avoidance and reduce financial risk to small and medium size businesses (e.g. using the UK model).
Tax wealth more, not work, through a comprehensive capital gains tax (as in most OECD countries), high-wealth tax, trusts tax, and wealth transfer tax (as in Ireland).
Adjust income tax settings to better reflect ability to pay, by introducing a tax free band, making tax bands more progressive and raising the tax rate on the highest income earners. Most workers would pay less or the same tax under this proposal.
Addressing the impact of GST on the least well off, by reducing the rate of GST or introducing rebate system for people on low incomes (like in Canada).
