A GST rise to at least 15% was among the recommendations of the Government's Tax Working Group, which looked at ways to reform the tax system.
Mr Key said no decisions had yet been made on the recommendations.
The proposal to raise GST to allow lower business and personal tax rates has caused concern it would leave families on low incomes struggling to buy basic goods.
Mr Key said if any changes had implications for lower income earners, they would have to be compensated.
"Obviously for pensioners, you would have to have an immediate increase in the pension; for those on Working for Families or benefits, there would have to be an immediate increase."
The Tax Working Group had estimated that the costs of compensating those on low incomes would mean increased revenue of just $200 million from a GST rise to 15%.
However, the Government had to look at wider considerations.
"There's no way we can allow those that are least well off to be put into a worse position. We are not looking to make money on changes we might make, but we are looking to make sure we have a better and fairer system."
Yesterday, Maori Party co-leader Pita Sharples said he was interested in a tax on financial transactions rather than an increase to GST a call also made by Progressive leader Jim Anderton.
Mr Anderton said imposing a small tax for every transaction was a fairer way to broaden the tax base and lower income tax without boosting GST.
Dr Sharples said any changes to income tax should be at the lower level for those earning less than $25,000 rather than the top rate.
However, Mr Key said lowering the top tax rate to 33c so it aligned with the trust rate would help stop people "sheltering" their income in trusts to try to avoid higher personal taxes.
"If you are a higher income earner, rightfully you should pay your share.
"One way to make sure people do that is to make sure the tax rates reflect what people think is fair."
Mr Key has also indicated some changes are likely for investment property owners, although he has ruled out a capital gains tax.
He said there were some issues the Government needed to consider before deciding on a land tax.
"Whether we would go to a land tax I wouldn't jump to that conclusion."
However, there was clearly a "hole" in the system if there was $220 billion invested in rental properties but the Crown was losing money.
"That hole probably needs to be plugged," he said.
Nobody should draw conclusions about what the Government would do and any decisions were not likely until the Budget.
Federated Farmers has objected strongly to the idea of a land tax and Dr Sharples said on Wednesday while he was generally supportive of taxing wealth and assets, he was concerned about such a tax on Maori lands, especially the large non-commercial holdings held under Treaty settlements.
- Claire Trevett of The NZ Herald
