18 Apr 2019

CGT backdown: Revenue Minister not worried about tax turnover

4:47 pm on 18 April 2019

The Revenue Minister isn't concerned about the impact ditching a capital gains tax will have on the tax take.

Minister of Police, Stuart Nash. The Government is responding to increased drug-related deaths by cracking down on the suppliers of synthetic drugs.

Photo: RNZ / Rebekah Parsons-King

The government announced it was abandoning a capital gains tax yesterday, after failing to get support from coalition partner New Zealand First.

Some commentators, including researcher and writer Max Rashbrooke, are now questioning whether the government will be able to afford its transformational work programme without such a tax.

However Stuart Nash said while he echoed the Prime Minister's disappointment, for him a capital gains tax was never about generating revenue, or fixing the housing market.

"It was about fairness, balance, and the integrity of the tax system.

"As Revenue Minister that's all I worry about, ensuring that people who earn income pay tax, not too much, not too little, just their fair share".

Mr Nash said the government was always looking for ways to make things easier for people and businesses, and to generate revenue by enhancing the integrity of the tax system.

He said the Tax Working Group's report came up with several recommendations he thinks will be really effective, and that Inland Revenue will now be looking into.

Finance Minister Grant Robertson has rejected claims the government will not be able to deliver on its big-cost promises without the revenue from a capital gains tax.

Mr Robertson said the government's spending plans - including this year's Budget - had not factored in any revenue from a capital gains tax.

He said the Tax Working Group was specifically asked to investigate revenue-neutral options where any money raised could returned through tax cuts.

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