8 Jun 2009

Working group can consider capital gains tax - Key

9:49 pm on 8 June 2009

A tax working group set up by the Government can consider the issue of a capital gains tax, says Prime Minister John Key.

Mr Key says he is happy for the idea to be debated, though he remains opposed to the proposal.

He says Secretary of the Treasury John Whitehead supports a capital gains tax, but one of the Inland Revenue Department's main advisers does not.

Mr Keys says a capital gains tax is a form of double taxation and very complex to administer.

The working group says it will look at all areas for broadening tax revenues.

Bob Buckle of Victoria University, who chaired the first meeting last Friday, says he expects the group to look at all areas for broadening tax revenues - including a capital gains tax.

However, Business New Zealand chief executive Phil O'Reilly says the group needs to face up to the unpopularity of a capital gains tax.

Meanwhile, another member of the group says the tax system is too reliant on corporate and personal taxes.

NZX chief executive Mark Weldon says the system is skewed in favour of houses at the expense of more productive uses - and a capital gains tax is one solution.

Mr Weldon says more needs to be done to channel savings away from property investment and into more productive uses for the economy.