The Tax Working Group (TWG) recommendation to introduce capital gains tax was torpedoed by Prime Minister Jacinda Ardern after failing to get any consensus from the government’s coalition partners – the NZ First Party and the Green Party.
KiwiSaver enhancements could still be in the pipeline
The government has indicated that consideration would still be given to initiatives focused on increasing KiwiSaver uptake and contribution rates, which we would see as a positive for the industry. The TWG has recommended lowering the PIR tax rates by 5% for KiwiSaver members on the 17.5% and 10.5% rates.
While at the outset the TWG’s capital gains tax recommendation could have resulted in major changes to the New Zealand investment landscape, the lack of political support means it is unlikely there will be any change to the current tax regime for investment funds in the foreseeable future.