Government drops Capital Gains Tax proposal

Government drops Capital Gains Tax proposal

Wellington, April 18, 2019

The Coalition Government will not proceed with the Tax Working Group’s recommendation for a Capital Gains Tax (CGT), Prime Minister Jacinda Ardern has announced.

 

Prime Minister Jacinda Ardern: “Many New Zealanders do not believe in CGT (RNZ Picture by Ana Tovey)

She issued the following Statement at a Press Conference last night.

The Tax Working Group gave the Government, and the country, an opportunity to look at the fairness of our tax system and debate options for change.

All parties in the Government entered into this debate with different perspectives and, after significant discussion, we have ultimately been unable to find a consensus. As a result, we will not be introducing a CGT.

Tax inequities

I genuinely believe that there are inequities in our tax system that a CGT in some form could have helped to resolve. That is an argument Labour has made as a Party since 2011.

However, after almost a decade campaigning on it, and after forming a government that represented a majority of New Zealanders, we have been unable to build a mandate for a CGT. While I have believed in a CGT, it is clear that many New Zealanders do not. That is why I am also ruling out a CGT under my leadership in the future.

Useful suggestions

The Tax Working Group was a valuable exercise that has delivered some useful suggestions well beyond just the debate on CGT, and I want to thank the Group for its work. In fact, a  majority of recommendations will either be investigated further or have formed part of our work programme.

The government is announcing its capital gains tax plans this afternoon in response to the Tax Working Group recommendations.

Posted by RNZ on Tuesday, April 16, 2019

There are other things that can be done to improve the fairness of our tax system. As such, the Coalition Government has agreed to tighten rules around land speculation and work on ways to counter land banking.

Digital Services Tax

Work will also continue to cut red tape for business and crack down on multinationals avoiding paying their fair share of tax in New Zealand. We have already made changes to address base erosion and profit shifting, and we will shortly release a discussion document on options for introducing a Digital Services Tax.

 My job now is to focus on the things we can and are doing to improve the wellbeing of all New Zealanders.

Long-Term Challenges

The Coalition Government is addressing the long-term challenges New Zealanders face such as Mental Health, Climate Change and Child Poverty and responding to the March 15 terrorist attack and keeping New Zealanders safe.

Those challenges will be my priorities for the remainder of this term.

Picture and Video under a Special Arrangement with www.rnz.co.nz

 

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