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GST proposal for KiwiSaver fees will not go ahead – Parker

Kiwisaver GST news

The Government will not proceed with a proposal to standardise the application of GST to fees and services of managed fund providers.

Inland Revenue and Treasury advised this change be made to remove a loophole used by large financial companies, so they would have to align with how others in New Zealand pay GST.

The move would also have brought New Zealand fund managers more into line with the approach in Australia.

“Smaller fund management providers who were doing the right thing were at a competitive disadvantage compared to others, mostly larger providers, who were using the loophole,” David Parker said.

“Generally it’s bad to have these sorts of distortions in the tax system as bigger players can exploit them, but if the sector as a whole is happy to operate with the status quo then we will leave them in place.

“During extensive consultation views were mixed on the merits of the technical change. The large companies profiting from the current set-up were opposed to the change, while smaller providers were more supportive of the change. This was because these providers who did charge the full GST on their service fees faced unfair competition from the bigger players.

“However since the announcement it has become clear that smaller providers now oppose it too.

“It’s important to clear up some inaccurate representation of the proposal. New Zealanders’ KiwiSaver contributions and balances were not going to be taxed under this legislation. However it is clear from the reaction to this proposal that it has caused concern for Kiwis,” David Parker said.

“I am proud of Labour’s role in introducing KiwiSaver and its role in securing the future of New Zealanders. We will never do anything to undermine it.

“By contrast, National will not commit to keeping KiwiSaver in its current form, and cannot be trusted to support this important scheme. When last in Government National ditched the Kick-Start payment and introduced a tax on employer contributions,” David Parker said.

“Because of the importance of public confidence in KiwiSaver and the need to ensure nothing unduly affects New Zealanders’ willingness to save, the Government will not to go ahead with the proposal contained in the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill.”

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13 COMMENTS

  1. If there is overall opposition, Jabsinda, mascot influencer, will chicken out. With mandates, lockdowns, and jabbing, the oppostion chickened out and so Jabsinda pusher her agenda in full. For the autocratic control, both labour and national join as mates. Sales tax is just a minor issue in the big scheme of things.

  2. Why doesn’t the government just say we have failed the nation, we have failed people of New Zealand and just resign. Jacinda Ardern and her ministers do not have the ability nor the understanding to save the nation from complete financial collapse. The nation is moving from embarrassment of our government to outright anger. Get your filthy hands off our nest egg and do all things possible to help and promote business. You can start by repealing legislation after legislation that binds businesses so harshly they cannot function. It is far too costly to manufacture in NZ, it is far too risky to take on staff, compliance costs and local fees for building is ridiculous. Sort it out or we the people of New Zealand will sort you out at the next election. I give this Government are rating of unqualified.

        • When you’re from a backwards North African war zone or middle eastern desert cult, with an average IQ approaching 80 and a tendency towards violence since your society just barely graduated from the Stone Age, I’m sure anything would sound like a step up.

          And the way the propagandists here are constantly howling from the rooftops that “WE NEED MORE PEOPLE ????”, you can bet your bottom devalued dollar they’ll all start rocking up soon.

          The politicians on both sides of the aisle are practically moist at the thought of cramming 18 million more people onto our two islands like their buddies did over in the UK. Cha-ching ????

          Set your watch, it’s coming.

    • Well said, Scallywag. Complianc costs, remember those things the incoming government promised to remove or address, have free enterprise hog tied and whipped. In one or two sittings they could be dealt with and the tax base wouldn’t be an issue. Duh.

  3. Just like interest, a legitimate claim under most Western tax systems on investment property being called a loophole. This govt are a bad joke as promoters of democracy and fiscal; responsibility. How about calling a snap election and giving us all some much needed relief.

  4. Just shows you what the minds of NZErs are money before health ,they were quick to take a poison jab then there is hell to play if they are going to lose money, grow a brain kiwis,you cannot injoy that money if your sick or dead.

  5. The purchase of Kiwibank was about controlling the Kiwisaver narrative. And about hiding the books from the public.

    My parents lost their retirement fund when Piggy Muldoon decided to think big. Yet today Marsden Point and other “think big” projects are rotting on the vine. But at least they built something with the $$ they defrauded that generation of.

    This governments used billions in the pandemic to what? Build more hospitals? No unfortunately although it may have been handy to actually invest money in health infrastructure during the pandemic aye. Mental patient beds? Suicide prevention. Housing? (oops let not go there)

    Lets be honest, none of it in earnest. Truly they couldn’t organise a piss up in a brewery.

    Now they need to recover their fraudulent use of taxpayers money by accessing taxpayer savings (Kiwisaver). Its the only asset that has any value. You dirty pack of bastards. Take your hands off our retirement / pension funds.

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