The Inland Revenue Department is preparing a Long-Term Insights Briefing called “Our Tax System: Bases and Regimes” to explore how New Zealand’s tax structures could evolve over time. It examines ways the government sets tax bases and meets revenue needs for the long term.
We argued that the current approach focuses too much on dividing the economic PIE rather than growing it. Our recommendations include prioritising investment-friendly policies, adjusting tax brackets for inflation, reducing the overall tax burden, and building a system based on simplicity, transparency, neutrality, and stability.
New Zealand faces capital constraints that limit productivity and per capita income growth. A tax system that discourages investment makes it harder to attract the capital needed to boost national prosperity and reverse declining living standards.
