OECD urges New Zealand to tax KiwiSaver only on withdrawal
The OECD has urged New Zealand to overhaul its retirement savings tax system. It recommends shifting the tax burden from contributions and returns to withdrawals only. The change could leave KiwiSaver members with significantly higher balances at retirement.
The OECD has urged New Zealand's government to rethink the tax treatment of retirement savings, according to RNZ Business. The organisation recommends shifting taxation away from contributions and annual returns and applying it only at the point of withdrawal.
By preserving compound returns inside KiwiSaver accounts, the change could leave members with significantly higher balances at retirement. The OECD report argues that, given New Zealand's ageing population and relatively thin retirement income base, the reform would also ease pressure on the public pension system.
It remains unclear how quickly Wellington might act. If adopted, the reform would open new business lines for financial-services firms in product design, tax advisory and digital platforms. For working households, the message is straightforward: the same contribution could fund a larger retirement pot.
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