Radio New Zealand - Te Reo Irirangi o Aotearoa

Tax group lukewarm on GST rise

Updated at 1:39 pm on 26 November 2009

A group reviewing the tax system appears to be veering away from the use of higher GST as a way of paying for cuts in company and personal taxes.

The Victoria University-led group will hold a one-day conference next week before making its recommendations to Government.

The Government's aim of equalising top personal and company tax rates, is expected to cost around $1.4 billion annually.

However a member of the tax working group, Geoff Nightingale, says a 2.5% increase in GST would raise only $200 million.

He says higher GST would hit the poor hardest and a large part of the revenue raised would have to be paid back in benefits.

Mr Nightingale says taxes on land or gains from the sale of rental properties would cover the cost of equalising the top tax rates.

The group will make its recommendations next month and any changes could be included in next year's Budget.

Listen to Geoff Nightingale on Nine to Noon

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