B3.2.6 New Zealand: Taxes
Description
This article is from the New Zealand FAQ, by Phil Stuart-Jones and Lin Nah with numerous contributions by others.
B3.2.6 New Zealand: Taxes
Inland Revenue Department Home Page http://www.ird.govt.nz/
New Zealand operates a Goods and Services Tax of 12.5% on ALL goods and
services sold and this is usually included in the display price. The
exceptions are purchases at duty free shops. Visitors cannot claim refunds
on this tax however when a supplier agrees to export a major item to a
visitors home address then GST will not be charged on the goods or the
freight.
Income tax (as at May 96):
$1 - $9,500 - 15% (allowing for the low income rebate)
$9,501 - $30,875 - 28%
$30,876 + - 33%
changing to:
$1 - $9,500 - 15% (allowing for the low income rebate)
$9,501 - $34,200 - 24% (up to $38,000 and down to 21% on July 1st 1997)
$30,876 + - 33%
on the July 1st 1996.
Apparently family support will also increase with a guaranteed minimum
family income, and a new independent family tax credit.
For wage and salary earners virtually nothing is tax-deductible except the
first $1500 of donations to churches, schools, and other charities, and
then only at a 33% rate (ie max $500).
There are various rebates for things like low incomes, children, donations,
Housekeeper, Home/Farm/Vessel Ownership, and others.
Government Revenue Source (1990)
Income Tax $16,950
Goods and Service Tax $5,500
Other Direct Taxes $360
Excise Duties $1,670
Highway tax $670
Other Indirect Tax $790
Total $25,940
How it was expected to be spent (1990)
Education $3,912.5
Health $3,791.1
Transport $711.6
Administration $2,769.0
Development of Industry $1,231.3
Government Borrowing $575.1
Foreign Relations $1,733.7
Social Services $10,292.1
Total $25,016.4
On a regional scale, all local authorities fund their activities (with some
limited back-up from central government) from 'rates'. These are taxes on
land owners, assessed annually as a fraction of the 'unimproved' (i.e. land
only) value of the land. Each local authority sets its own rates and they
can be challenged as unreasonable in court - some Wellington City rates for
the current year have just been thrown out by the High Court.
Note that we do not have overlapping local authorities as in the U.S. Any
given place is controlled by one, and one only, local authority - either a
"city" or a "district" - and so the only taxes that people pay are local
authority rates and central government taxes.
There are still some anomalous levies and taxes on certain goods - a high
excise duty on wine, for example - that should not really exist in the GST
environment.
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