Potential Changes to Trust Tax Hike shows Government is Lawmaking on the Hoof

Responding to reports that the Finance Minister wants to exempt some trusts from paying the new 39% trust tax rate, Taxpayers’ Union Campaigns Manager, Connor Molloy, said:

“What is clear is that this tax hike has never been properly thought through and as a result we are seeing bad policy that is rushed, unfair and frankly unworkable. The mooted changes, while potentially alleviating some of the fairness concerns, will still punish some of those who use trusts for purposes other than tax reasons such as farmers and small business owners.

“What’s more, if these changes go ahead, the change could generate almost no revenue but will add significant cost and complexity onto New Zealanders. The Trust tax hike will not hit the big end of town who will simply restructure their assets into companies and PIE funds – leaving them paying an even lower rate than they do now.

“Nicola Willis must, at the very least, put this tax hike on hold until the full implications are properly understood and dealt with. Even better would be to focus on what she promised to do and cut spending rather than hiking up any taxes at all."