Government urged not to rush Capital Gains Tax

Jacinda Ardern Taxes meme

John Cuthbertson from Chartered Accountants Australia and New Zealand has written to Grant Robertson asking him not to rush the implementation of Capital Gains Tax (CGT) but rather to take the time to get it right. This is good advice from CAANZ, and it is advice that Robertson should not disregard lightly. However, we all know that this is an ideological drive to introduce a CGT at all costs, so Robertson is not going to listen to Cuthbertson and so it turns out.quote.

The Government has brushed off concerns that it would run out of time to properly implement a capital gains tax before next year’s general election.

John Cuthbertson, New Zealand tax leader for Chartered Accountants Australia and New Zealand (Caanz), said he had written to Finance Minister Grant Robertson and Revenue Minister Stuart Nash urging them to consider “deferring the introduction date of a capital gains tax and to stage its application, starting with income-producing land”.

The Government will release a report by the Tax Working Group on February 21 that endorses a broad-based capital gains tax. end quote.

You cannot help but feel that the whole Tax Working Group was a charade, particularly with Michael Cullen at the helm. This government is going to pass a CGT bill come hell or high water and the advice from people who truly understand the implications of badly drafted tax legislation is going to fall on deaf ears. quote.

“From what we can see at the moment, there is not enough time for the Government to fully consult and then legislate, to meet their own deadline,” he said.

A spokeswoman for Robertson said ministers “were comfortable they could achieve the timeframe outlined”. end quote.

Of course they are. They have always known that they were going to do this. The whole consultation thing is just a pretence that the government is actually going to listen to anything anyone says, even if the advice is sound. quote.

Cuthbertson said a capital gains tax would be a big change for taxpayers. “It’s crucial that the necessary legislation is concise, efficient and clear.”

Public consultation was extremely important to ensure any changes got support from the public and were well designed, he said.

“It’s these early consultation and design stages, where stakeholders and the public have the opportunity to share their views on a capital gains tax, that are at risk of being dangerously shortened to squeeze in this process before the election.

“When you consider that Inland Revenue also needs time to draft discussion documents and legislation, the timeframe is inadequate,” he said.

Stuff end quote.

The importance of properly drafted legislation cannot be overstated. The government will have 18 months to consult on the issue, take such consultations into consideration, draft legislation and then pass it in the house. There will be a lot of debate and a lot of issues arising from this. Rushing it through the house will result in poor tax legislation, which will only require amendments and redrafting not much further down the track.

This is going to be another government shambles. Their determination to pass a capital gains tax come hell or high water is going to cost them more credibility and further loss of faith. They have no intention of taking the views of others into account. This is where the catch phrase – “Let’s do this” has real meaning.

A rushed Capital Gains Tax come hell or high water