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Friday, 12 November 2010

Increase savings, increase GST

The Savings Working Group is recommending another increase in GST plus further cuts to the top income tax rate to increase New Zealand's rate of savings:
Increasing the goods and services tax to 20 percent and cutting the top personal tax rate to 29.2 percent would be fiscally neutral and have a positive impact on both private and national savings rates, according to background papers prepared by the Inland Revenue Department for the government-appointed group tasked with finding ways to lift New Zealand’s savings across the board.
As a small business owner (Web Social Ltd) I'm weary of another GST increase. I'm still working through the changes from the last increase. Of course, the lower income tax for top taxpayers is attractive, but will be howled at by the left. What the Government really needs is a glimmer of success from the last tax-switch before making further moves.