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Inland Revenue

Tax Policy

PUBLISHED 20 June 2001

Tax Review issues paper released

The Tax Review today released an issues paper that will form the basis of its second round of public submissions. The issues discussed in the paper include capital gains taxation; alcohol, tobacco and gambling taxes; taxation of 'income' from owner occupied housing; financial transactions tax; eco-taxes; personal and corporate tax rate scales; the taxation of different legal entities; and international tax issues. The issues paper is available at See also:


Tax Review releases issues paper

The Tax Review 2001 today released an Issues Paper discussing the main arguments the Review will consider as it develops its final recommendations for the Government.

Review chairman Rob McLeod said today:

"We have been asked to complete a broad review of the tax system and to develop proposals to guide the future direction of New Zealand tax policy. The paper released today is the first major milestone in that development process.

"The structure of the tax system has changed dramatically in the last 35 years, in line with a growing view that broad-based low-rate revenue-raising strategies are the most efficient and the fairest in a modern, open society.

"This Review, like its predecessors, has to grapple with inescapable trade-offs among competing policy goals. We have tried, as previous reviews did, to let the evidence speak for itself particularly where it questions generally accepted conventions.

"The report draws on public submissions and we look forward to testing it rigorously against further submissions, before presenting any final recommendations.

"Consultation with the public and the tax community plays a key role to play in the process, and we are now calling for our next round of submissions," Mr McLeod said.

Submissions can be made now and up to 5.00 p.m. on 1 August 2001.

Electronic submissions are preferred and can be e-mailed to
[email protected].

Written submissions should be addressed to:
The Secretary
Tax Review 2001
P.O. Box 3724

The Terms of Reference of the Tax Review and today's Issues Paper are available on the Review's website at


Contact for enquiries: Colin Lynch (04) 922-2500

Hon Dr Michael Cullen
Minister of Revenue


Paper opens 'first principles' debate on tax - Cullen

"The Tax Review has delivered a tough-minded and radical analysis which should spark a 'first principles' debate on taxation in this country," Finance Minister Michael Cullen said today.

Dr Cullen was commenting on the launch of the Review's issues paper. The Review will now conduct a second round of consultations before reporting finally to the Government in October this year.

"The Review was asked by the Government to explore a series of questions but was accorded complete independence in how it approached its brief and in the conclusions it formed.

"As I have stated previously, no proposals for significant change will be implemented without first seeking a mandate from the electorate through the 2002 general election," Dr Cullen said.

"I hope the ideas canvassed by the Review can be debated seriously without reflexive position-taking.

"The Government has never indicated that we would expect to pick up all the Review's recommendations and has always hoped that all political parties will feel free to draw on the final report as a resource.

"Accordingly, I intend to refrain as much as possible from commenting on any of the specific issues the inquiry has raised. We need a broad discussion involving many voices so I would encourage individuals and organisations to make submissions to the Review," Dr Cullen said.

The issues paper and further details about the Tax Review are available on the Review's website:

Contact: Patricia Herbert [press secretary] 471-9412 or 021-270-9013: email [email protected]

Attached: Review membership and terms of reference.

Chairperson: Robert McLeod, Managing Partner of Arthur Andersen (New Zealand). Members: Srikanta Chatterjee, Professor of Economics at Massey University; Shirley Jones, Chair of the Council of Otago Polytechnic and an accountant specialising in small business; David Patterson, a Partner with the law firm Rudd Watts and Stone; and Ted Sieper, an Australian economist who has advised Governments on both sides of the Tasman.

The Review's focus was deliberately broad. It was asked the following questions:

  • Can the tax system be fairer in its role of redistributing income? This includes: whether the income tax base should be broadened; the extent to which marginal tax rates should increase with income, wealth and expenditure; the best mix between different tax bases, such as income, consumption, financial transactions and assets.
  • How the tax system can be designed to encourage desirable conduct such as work and saving and to discourage such undesirable behaviour as the wasteful use of non-renewable resources.
  • How can the level of tax that is reasonably required by the Government for the provision of essential social services be achieved reliably in the medium and long term?
  • Do the tax system and tax rates need to be modified in light of new technology and international competition?