31 Aug 2009

NZ review group considers effect of Australian tax idea

10:14 pm on 31 August 2009

Members of a group set up to look at the tax system say they are concerned by indications Australia may cut its company tax rate.

In a speech last week, the head of a review of the Australian tax system, Ken Henry, said the government should seriously consider cutting its company tax rate below New Zealand's.

A member of the group reviewing New Zealand's system, Rob Cameron, says the Government would have to react if that were to happen.

Another group member, PricewatehouseCoopers chairman John Shewan, says the response could include cutting company tax below its current rate of 30 cents in the dollar.

Mr Shewan says the Government would then need to find a way of plugging the gap in its revenues, perhaps by increasing GST.