Capital Gains Tax Ruled Out

The current Labour-led Coalition Government will not proceed with the capital gains tax recommended by the Tax Working Group.The Prime Minister, Jacinda Ardern, said that the three parties in Government had been “unable to find a consensus”. She expressed regret that she could not get the CGT over the line:“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”.Despite the focus on CGT, the Tax Working Group had made a number of other recommendations for amending the tax system. The Prime Minister said that “the majority of [these other] recommendations will either be investigated further or have formed part of our work programme”.The Finance Minister noted that the Coalition Government:

• had agreed to tighten rules around land speculation and work on ways to counter land banking — including directing the Productivity Commission to include vacant land taxes within its inquiry into local government funding and financing
• would do further work to ensure that multinationals pay their fair share of tax in New Zealand
• will shortly release a discussion document on options for introducing a digital services tax, and
• will not introduce resource rentals for water or a fertiliser tax in this term of Parliament.

Read the list of all 99 recommendations made by the Tax Working Group, and the Government's response to them.