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The Tax System in New Zealand: An Appraisal and Options for Change

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  • Thomas Dalsgaard

Abstract

New Zealand’s tax system is one of the most neutral and efficient in the OECD. Bases are generally broad and rates are moderate. The full imputation system for dividend payments works to reduce tax distortions for corporate financing decisions, while efficiency in corporate investment decisions is encouraged by the low level of targeted tax incentives. The tax system is also more neutral vis-à-vis private saving than in most other countries, in particular because no general incentives are provided to private pension saving. There is hence no immediate need for major tax reform, but several second order issues should be addressed in order to reap the full benefit of an otherwise well-functioning system. The most important improvement would be to broaden the income tax base by including capital gains on a more comprehensive scale as well as introducing a tax on imputed rental income of owner-occupied housing. These two steps would not only reduce horisontal inequities and hence tax ... Le système fiscal de Nouvelle-Zélande est l’un des plus neutre et efficace de l’OCDE. Les assiettes sont généralement larges et les taux modérés. Le système d’imputation total pour les dividendes aide à réduire les distorsions d’impôts pour les décisions de financement des entreprises, alors que des taux d’imposition ciblés peu élevés favorisent les investissements d’entreprise. Le régime fiscal est également plus neutre pour l’épargne privée que pour la plupart des autres pays, ce qui est plus particulièrement dû à l’absence de mesures en faveur de l’épargne-retraite privée. Il n’y a donc pas de besoin immédiat d’une réforme importante du système fiscal, mais des questions plus secondaires méritent d’être posées, pour tirer les pleins bénéfices d’un système qui fonctionne plutôt bien par ailleurs. La plus importante mesure serait d’élargir l’assiette pour l’impôt sur le revenu, en incluant les gains de capital de façon plus large, et d’introduire un impôt sur la valeur locative ...

Suggested Citation

  • Thomas Dalsgaard, 2001. "The Tax System in New Zealand: An Appraisal and Options for Change," OECD Economics Department Working Papers 281, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:281-en
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    File URL: http://dx.doi.org/10.1787/382808014300
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    Cited by:

    1. Starke, Peter, 2005. "Resilient or residual? From the wage earners' welfare state to market conformity in New Zealand," TranState Working Papers 22, University of Bremen, Collaborative Research Center 597: Transformations of the State.
    2. Gerard Hughes, 2001. "The Cost and Distribution of Tax Expenditure on Occupational Pensions in Ireland," Papers WP139, Economic and Social Research Institute (ESRI).
    3. Helene Poirson Ward, 2006. "The Tax System in India; Could Reform Spur Growth?," IMF Working Papers 06/93, International Monetary Fund.
    4. Ramón E. López & Eugenio Figueroa, 2011. "Fiscal policy in Chile: Hindering sustainable development by favoring myopic growth," Working Papers wp346, University of Chile, Department of Economics.
    5. Felicity C Barker & Robert A Buckle & Robert W St Clair, 2008. "Roles of Fiscal Policy in New Zealand," Treasury Working Paper Series 08/02, New Zealand Treasury.

    More about this item

    Keywords

    fiscalité; New Zealand; politique fiscale; tax policy; taxation;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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