Taxation in New Zealand is collected at a national level by the Inland Revenue Department (IRD) The Inland Revenue Department or simply Inland Revenue is the New Zealand government department responsible for the collection of taxes, payment of family assistance tax credits (See Working for Families), payment of Paid Parental Leave, collection and payment of child support and the collection of student loans and KiwiSaver on behalf of the Government of New Zealand The politics of New Zealand takes place in a framework of a parliamentary representative democratic monarchy. The basic system is closely patterned on that of the Westminster System, although a number of significant modifications have been made. The head of state is Queen Elizabeth II, but actual government is conducted by a Prime Minister and. National taxes are levied on personal and business income, as well as on the supply of goods and services. There is no capital gains tax, although certain "gains" such as profits on the sale of patent rights are deemed to be income. Local property taxes (rates Rates are a type of taxation system in the United Kingdom, and in places with systems deriving from the British one, used to fund local government) are managed and collected by councils. Some goods and services carry a specific tax, referred to as an excise or a duty An excise or excise tax is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is a tax on the production or sale of a good eg Alcohol excise or gaming duty. These are collected by a range of government agencies such as the New Zealand Customs Service The Customs Service is a state sector organisation of New Zealand whose role is to provide border control and protect the community from potential risks arising from international trade and travel, as well as collecting duties and taxes on imports to the country. New Zealand's Minister of Customs is the Hon. Maurice Williamson.
New Zealand went through a major programme of tax reform Tax reformers have different goals. Some seek to reduce the level of taxation of all people by the government. Some seek to make the tax system more/less progressive in its effect. Some may be trying to make the tax system more understandable, or more accountable. Many organizations have been set up to reform tax systems worldwide, often with the in the 1980s. The top marginal rate of income tax was reduced from 66% to 33% (since increased to 39% in April 2000) and corporate income tax rate from 48% to 33% (reduced to 30% in 2008). Goods and services tax Value added tax , or goods and services tax (GST) is a consumption tax (CT) levied on any value that is added to a product. In contrast to sales tax, VAT is neutral with respect to the number of passages that there are between the producer and the final consumer whereas sales tax is levied on total value at each stage (though in the U.S. and many was introduced, initially at a rate of 10% (now 12.5%). An OECD The Organisation for Economic Co-operation and Development (in French: Organisation de coopération et de développement économiques, OCDE) is an international organisation of 30 countries that accept the principles of representative democracy and free-market economy. Most OECD members are high-income economies with a high Human Development Index report in 2001 described the New Zealand tax system as one of the most neutral and efficient within its membership.[1]
Tax reform continues in New Zealand with key issues being:
- business taxes and the effect on productivity and competitiveness of NZ companies[2]
- differences in the treatment of various types of investment income[3]
- international tax rules [4]
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