15 Jul 2011

Tax policy will close big loophole - Goff

10:11 am on 15 July 2011

Labour leader Phil Goff says his party's capital gains tax policy will close the largest single loophole in the tax system.

The policy includes a 15% tax that would apply to profits made on investment property and shares, but would not cover KiwiSaver payouts, the family home, or niche collectables such as antiques.

Mr Goff told Morning Report that the current system favours property speculators who pay no tax on property transactions.

He said some tax experts have told him that accountants and lawyers will lose out under the policy because it will remove complexities and tax avoidance.

Mr Goff said Labour is making the system fairer.

Finance minister's comment

Finance Minister Bill English says the Labour's capital gains tax policy still does not show how Labour will fulfill its promises to pay off debt and increase spending.

He told Morning Report that Labour won't be able to afford the capital investment the Government needs to make to implement the tax.

Mr English said the Government is already taxing the property sector by $800 million per year to dampen property speculating.

Revenue Minister Peter Dunne says the proposed capital gains tax will do more harm than good.

Mr Dunne says policies are already in place which ensure tax is paid on much of what would be captured by a capital gains tax.