Tax: Has Tax Reform Ended, Or Is It Just On Hold?
June 3rd, 2010
Does Budget 2010 represent the end point for tax cuts, at least in the short to medium term? PwC Chair John Shewan says he thinks NZ could aim for a 28% top rate within two years and 25% by 2015. John Key says he is comfortable where rates are for the mean time. Shewan’s forecasts appear to have some support from the revenue strategy buried in the annex to the Budget which records the Govt is “committed to further fiscally neutral reductions in income tax rates as the economic and fiscal conditions allow.” The strategy also refers to the Govt’s commitment to aligning the personal, trust and company tax rates. Given the company rate has fallen to 28% a reduction in the top tax rate to the same level seems on the cards. The challenge for the always-wanting-to- please Key Govt will be how to do this while simultaneously delivering cuts at the lower end.
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Duncan Cotterill