Government says no to Capital Gains Tax for New Zealand
18 Apr 2019
Yesterday (Wednesday 17 April), Prime Minister Jacinda Ardern announced that the Coalition Government will not be proceeding with the Tax Working Group’s recommendation to introduce a capital gains tax (CGT) in New Zealand. Ardern also stated that there would be no CGT during her tenure as NZ Prime Minister.
Following the news, Hospitality New Zealand CEO Vicki Lee has said that the announcement made by Government yesterday regarding CGT is a positive outcome for Hospitality New Zealand members, as well as businesses and families up and down the country. Lee commented: “We are delighted on behalf of our members that the Government has seen clearly that a capital gains tax would not only go against the wishes of the majority of New Zealanders, but also potentially have a negative impact on business growth in New Zealand. Hospitality NZ has worked long and hard to help make this clear and we are pleased that the Government has finally come to a similar conclusion regarding CGT.”
Speaking from the Beehive yesterday, Ardern said: “…after almost a decade campaigning on it, and after forming a government that represented the majority of New Zealanders, we have been unable to build a mandate for a capital gains tax. While I have believed in a CGT, it’s clear many New Zealanders do not. That is why I am also ruling out a capital gains tax under my leadership in the future.”
Ardern added: “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.
“Work will also continue to cut red tape for business and crack down on multi-nationals 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.”
According to a recent Reid-Research poll commissioned by Business New Zealand, 65 percent of voters in NZ were not in favour of the Government implementing a CGT. The poll also revealed that 90 percent of voters did not support a CGT on KiwiSaver earnings, versus 4.4 percent that supported the idea.
Watch the full announcement by the Government here