Expert: NZ likely to get 'CGT light'

Author
Newstalk ZB ,
Section
Audio,
Publish Date
Monday, 15 April 2019, 6:31p.m.
Details of a Capital Gains Tax is expected to be released this month. (Photo / File)

Prime Minister Jacinda Ardern won't say if her Cabinet has signed off a Capital Gains Tax.

At her weekly post-Cabinet press conference, Ardern would only say that the Government's response would be released in April, as she had previously outlined.

There were rumours that today would be the day, but Ardern only confirmed that the Cabinet has signed off on the Wellbeing Budget that will be released next month. 

Speculation therefore continues about whether the Government will accept the recommendations of the Tax Working Group and implement a Capital Gains Tax.

Head of Policy at CPA Australia Paul Drum told Larry Williams that the Government will announce a watered down CGT. 

"If you look at the Tax Working Group's model, it's what I would call 'CGT heavy'. I think New Zealand will go with a CGT light model. There might be additional discounts for other assets," Drum says, on top of the exemption for the family house.

"Other assets you might get a discount on any capital gain you make, or they might be exempt all together."

Drum says that they could also only taxing half of the capital gains. 

"That would be more politically appealing, I'm not saying it;'s the right measure or the right amount, but I think they will be looking at that." 

He says that they need to come up with a new tax system that does not discourage capital inflows and investment in New Zealand.