Senior Government officials are pushing for radical revamp of
the tax system, papers show.
Cabinet papers released under the Official Information Act do
not include specific details of such changes but suggest a
move from income to spending tax, Radio New Zealand reported.
That may include reduced income tax and increased GST,
currently 12.5 percent.
The papers also included a proposal for the replacement of
the Research and Development tax credit.
They include a direct grant or giving small businesses
vouchers to buy research.
Prime Minister John Key has repeatedly said New Zealand must
create a world-class tax system to increase productivity and
fight off the recession.
Earlier this month Finance Minister Bill English did not rule
out radical reform of the tax system.
A tax expert group has been meeting to consider reform of the
tax system and Mr English told journalists that he had an
open mind.
Mr English said straight cuts to income tax were just not
possible in the current economic climate, with the Government
facing years of deficit and ballooning debt.
Asked if he might consider raising GST in order to cut income
tax, Mr English said again he would not rule it out.
He also indicated he was more open-minded about implementing
a capital gains tax.
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