A statement by a United Nations Committee asking countries to verify the tax is being applied proportionally to the richest individuals and questioning GST justice must request the scrutiny of New Zealand’s tax configurations, commentators say.
The Committee on Economic, Social and Cultural Rights said it wanted to emphasize the need to ensure that tax policies promote equality and non -discrimination and the mobilization of resources for better results of economic, social and cultural rights.
He said that regressive and ineffective tax policies can disproportionately affect low -income families, women, and disadvantaged groups.
“An example is a tax policy that maintains low personal and corporate income tax without properly addressing high income inequalities.
“In addition, consumer taxes, such as value added tax [GST in New Zealand]It may have adverse impacts on disadvantaged groups such as low -income families and single -padded families, which usually spend a higher percentage of their income on everyday goods and services. In this context, the Committee asked states that the parties designed and implement effective, adequate, progressive and socially fair tax policies. “
He said there must be comprehensive assessments made of existing tax policies and proposals on economic, social and cultural rights.
This should include the proportion of taxes for GDP, individual and corporate income tax revenue and consumption tax and general impact and tax burden on different income groups, women and disadvantaged groups.
He said countries may consider measures, such as ensuring that the richest and highest income was subject to a proportional and appropriate tax burden, focus on a more direct income tax, rather than taxes such as GST, and properly taxed large companies, especially multinational.
“In addition, a holistic review of the tax system is essential to ensure that the combined effect of these measures promotes economic, social and cultural rights, reducing inequality. Collectively, these measures could help the parties of the parties expand their tax base and strengthen the redistributive effect of their national tax systems.”
Thalia Kehoe Rowden, executive director of the Human Rights Measurement Initiative, said the organization produced scores that showed how the governments of New Zealand and around the world were performing in terms of respecting human rights.
She said tax policy would probably be a driver of the New Zealand’s low scores.
“One thing the committee emphasizes is whether countries use consumer regressive taxes, such as GST, will affect more people with low or no income … The committee warns them against them.”
She said a “huge” change was needed.
Allan Bullot, a partner of Deloitte, said if the GST was regressive, depending on whether it was considered a proportion of income or spending.
“There is an element of GST regression, but when inner revenue analyzed it in relation to expenses, it was widely proportional or slightly regressive.”
Low -income people were more likely to pay rent, which did not have GST, instead of buying a new home, which would include GST, for example, he said.
He said the GST was very effective as a tool for the government to raise a large amount of money with relatively easily.
“It’s not perfect, but if you tried to make changes to social policies to guide you, at a huge risk of compromising the collection of a significant amount of government revenue.”
He said there were few countries that moved away from an VAT or GST.
He said taxes designed to change behavior – such as taxes on alcohol and tobacco or sugar taxes can be very regressive, as the UN statement pointed out.
“You get to the point while trying to change the behavior that is taxing a very significant amount of a person’s income. There are points that need to be worked on.”
Green party co-leader Chlöe Swarbrick said it was not the first time these concerns were raised.
A 2023 study that analyzed the tax rate paid by 311 of the richest New Zealands found that they paid an effective 9.4 %effective tax rate.
Treasury said an ordinary person was paying 20.2 %.
When they paid taxes, the richest people paid a fee of about 30 %, but had more sources that were not taxed.
“The most insightful result of this research was to demonstrate that this has not happened, it is practically a direct consequence of tax and economic environments. Those at the top pay an effective tax rate half of the average New Zealand. This is not the first time this kind of thing has been called by international institutions.”
She pointed to the IMF statement that New Zealand could consider a capital gain tax.
“This is not a soft and cute report on how we guarantee that our human rights are met. Civil society and democracies must work.”
A Gate -Revenue Minister Simon Watts not wanted to comment.
