Cabinet paper

Cabinet Paper CAB-19-SUB-0042: Final Report of the Tax Working Group - 14 February 2019

Publication type:
Cabinet paper
Status:
Current
Document (signed) date:
Issue date:
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Corporate author:
Office of the Minister of Finance
Office of the Minister of Revenue
Viewpoint:
Government
Publication category:
Official information
Copyright:
© Crown Copyright, Attribution 4.0 International (CC BY 4.0)
Ministerial portfolio:
Finance
Revenue
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This material is part of the release of Finance portfolio Cabinet material since 1 January 2019 as per Cabinet Office Circular CO (18) 4.

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Only the Proposal and Executive Summary sections of this Cabinet paper are extracted below in HTML.  If you require a full HTML version please contact [email protected] and cite CAB-19-SUB-0042 as a reference.

Extract from Cabinet Paper CAB-19-SUB-0042: Final Report of the Tax Working Group#

Proposal

  1. This paper informs Cabinet of the findings of the Tax Working Group’s Final Report.

Executive Summary

  1. This Government established the Tax Working Group (TWG) to find ways of improving the structure, fairness and balance of the tax system. This includes whether the tax system promotes the right balance between supporting the productive and speculative economies.
  2. We are pleased to advise Cabinet that the TWG has now provided us with its Final Report. The TWG intends to publicly release this report on 21 February 2019.
  3. The key topics in the Final Report are:
  • extending capital income taxation – including detailed design proposal;
  • environmental taxes;
  • taxation of business and savings;
  • personal income taxation; and
  • revenue-neutral packages.
  1. The Final Report also reaffirms the findings in the Interim Report on:
  • GST and financial transaction taxes;
  • corrective taxes;
  • the treatment of charities;
  • the administration of the tax system;
  • the integrity of the tax system;
  • international income taxation;
  • the future of work; and
  • housing.
  1. All members of the TWG support extending capital income taxation, although there is disagreement about the scope of the extension. A clear majority (8 members) recommends a broad extension, applying to most assets. A minority (3 members) recommends a more limited extension, applying only to residential rental properties.
  2. The TWG also makes 97 other recommendations in its Final Report. Many of these are recommendations that were also made in the TWG’s Interim Report. While the TWG’s Interim Report covered a wide range of issues impacting the structure, fairness and balance of the tax system, the Final Report focuses on just a few specific issues.
  3. Decisions on how to respond to the TWG’s recommendations will need to be made by April 2019. However as stated previously, no changes from these decisions will come into effect until after the 2020 election.

[Extract ends]

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