When it comes to taxes, firms are already getting their own insurance accountant to make sure they are covered no matter what happens. With the impending desire of the government to increase the threshold for the income tax to $90,000 from the current 70,000, there is also the need to increase the tax rate for top levels. Based on the Treasury’s online tax calculator, it needs to be raised by 1.5 per cent from the current 33 per cent.
It these were to be implemented, it would benefit everyone who is earning below $130,000 annually. This is due to the fact that anyone earning from $70,000 to $90,000 will only get a 30 per cent tax.
Stuart Nash, the minister for revenue, is not willing to give any comment but he reiterated that the government is not able to give out a decision yet regarding the tax policy to be implemented for the coming 2020 election.
This kind of talk about decreasing the number of individuals covered by the top level of the tax band though is not foreign to Geof Nightingale who is the current tax partner at PwC and he is someone who also used to be a member of the Tax Working. He thinks that the government will not have much of an option once the next election is concluded since it has already eliminated the possibility of turning to broad-based CGT while the current prime minister is still in her office.
Nightingale added that it must happen sooner or later because more and more people are being included in the top tax bracket and this is something that the government felt they need to do something. If the growth of the economy is not stronger than anticipated then it will go two ways – either the government reduces the spending or the tax base is altered to be broader.
Tax is a topic considered to be quite complex that insurance accountant is often subscribed to by firms to make sure they do not compromise their profession. As for the fate of New Zealand, they will have to wait for the next election in order to be concretely sure of these matters.