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NZ still a high tax countryRob Hosking | Friday August 21 2009 - 07:50amThe latest KPMG international survey on tax shows New Zealand’s position has improved – but it is still a high tax country. New Zealand is now 24th highest out of 83 countries in the level of personal tax paid – last year the country was 18th highest but the dropping of the top rate from 39% to 38%, and the shifting of its threshold from $60,000 to $70,000 income a year has caused the move, says KPMG New Zealand partner Paul Dunne. The big difference from most countries though is New Zealand’s top rate still kicks in very low, he said. “Our average wage is a little above $40,000 a year, our top rate kicks in at under two times the average wage. "For example in Australia you need to earn over $150,000 in order pay the top rate,” Mr Dunne said. “The concern is that this has long encouraged overseas migration and the big OE which has been a constant drain on New Zealand’s workforce. It’s a known fact that New Zealand has one of the highest workforce migration rates in the Western world,” Mr Dunne said. This point has long been made to successive governments: Labour, back in 2001, found itself criticised on this point by a report it commissioned on growth and innovation and getting more talented people to stay within New Zealand. The KPMG global study recorded a general decline in top personal income rates over the past seven years, but in 2010 there are indications that a reversal may be on the way. Some countries in the European Union, including Ireland and the United Kingdom specifically, are already proposing rate increases for its top earners. |
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