The National Party says Labour's plans to scrap secondary tax are nothing new and it plans to abolish the tax itself within the coming year.
Labour leader David Cunliffe announced the plan to scrap secondary tax while campaigning at the Otara Market in Manukau. Photo: RNZ / Craig McCulloch
The Labour Party announced its policy in South Auckland this morning, saying it would allow people to pay the correct amount of tax as they earn it.
Secondary tax is paid by those who have more than one job.
The rate is usually higher than the primary source of income but it often results in a refund at the end of the financial year.
Revenue Minister Todd McClay said that for the past two years the Government had been working with the IRD to simplify and modernise the tax system and it planned to introduce those changes next year.
"What that means is irrespective of the number of jobs that people have, there is likely to be real-time reporting, so the amount of tax that they pay on all of those jobs will align with what their tax obligation would be, similar to if they only had one job."
Labour leader David Cunliffe said the current secondary tax regime made life even more difficult for low paid workers who are having to work at two or three jobs to support their families.
"That will be much easier for people who are casualised and working more than one job. For many people, even though there is a theoretical wash-up at the end of the year, it's a big hassle to do it. It means they're paying too much tax in the short-term and it means they don't always get it back."
Labour promised today to scrap the secondary tax system within five years if elected.
Mr McClay said Mr Cunliffe was announcing policy which at the very best would be redundant within the next 12 months.
David Cunliffe at Otara Market in Manukau this morning. Photo: RNZ / Craig McCulloch
