A tax working group has identified five key questions about our tax system that we all need to think about for the future.
By visiting the Future of Tax website you can have your say on how you want New Zealand’s tax system to change.
In 2017, an international survey carried out by US think tank, Tax Foundation, ranked New Zealand the second most competitive tax system in the world.
Having no inheritance and general capital gains tax, means New Zealand’s system is promoted internationally as simple and fair.
However, one of the greatest minds to walk the planet, Albert Einstein once said: “the hardest thing to understand is the income tax.”
And, if it was hard for clever clogs Bert to understand – what about the rest of us?
Whether it is through our wages, company profits, property or shares – every day thirty cents of every dollar made in New Zealand is taxed.
Comedian Bill Murray said: “The best way to teach your kids about taxes is by eating 30 per cent of their ice cream.”
This is a hard hitting, but true analogy.
Are we taxing the right things?
Rents are rising faster than wages.
Should the tax system do more to make housing more affordable?
We impose GST on fresh fruit and vegetables, should this be scrapped?
We don’t tax long term investments such as art or fine wine.
And, we don’t tax the profits of overseas companies with no New Zealand base.
If you feel the system could be changed for the better, have your say on the future of tax.
If you think New Zealand’s tax system is tricky, look at these crazy taxes that have been implemented throughout history.
In 1705, Russian Emperor Peter the Great placed a tax on beards, hoping to force men to adopt the clean-shaven look.
The French had a salt tax, which was one of the contributing factors to the French Revolution.
Japan imposed a tax on whiskey based on the percentage of alcohol by volume, so Japanese whiskey manufacturers began diluting their product with water to avoid the tax.
England introduced a tax on hats in 1784. To avoid the tax, hat-makers stopped calling their creations hats, leading to a tax on any headgear by 1804.
Even today, individual countries tax the most unusual things.
The UK has the TV tax, much like the old television licences Kiwis paid for until 2000.
If a person is blind and owns a TV in his or her home, he or she still has to pay the tax, but only half of it. Crazy.
New York has a sliced bagel tax and Maine a blueberry tax.
How does New Zealand compare to the rest of the world?
Sitting comfortably ahead of the rest of the pack, Belgium has the unenviable title of having the highest income tax of all the OECD countries, with a personal income tax rate of an eye-watering 53.7 per cent.
While the lowest personal income tax rate in the world is set at 0 per cent.
Yes, this does exist! Countries including The Bahamas, Cayman Islands and United Arab Emirates are tax havens.
With a non-existing tax rate, it simply means that your money is yours to keep.
It's one of the reasons why people with high incomes move to these countries.
Whether it be hats, TVs or blueberries, tax is an inescapable fact of life.
Richard Nixon once said, “Make sure you pay your taxes, otherwise you can get into a lot of trouble.”, if he was right about one thing, it was this.
Click here and have your say today.