Raising GST threshold 'just shifts the problem,' tax expert warns
New Zealand opposition leader Chris Hipkins says he would raise the goods and services tax (GST) registration threshold to help small businesses if elected. A tax expert, however, warns the change would merely shift the compliance problem rather than resolve it.
New Zealand Labour leader Chris Hipkins says his party would raise the goods and services tax registration threshold to ease the burden on small businesses if it forms the next government. The proposal is aimed at reducing administrative overhead for lower-revenue businesses.
A tax expert, however, said raising the threshold would not solve the underlying problem, merely shifting it to businesses just above the new cutoff. The expert noted that GST's tiered structure will always recreate similar distortions somewhere along the scale.
Small business groups have welcomed the proposal, while fiscal experts argue the government should instead consider a broader overhaul of the tax system. The policy's final shape is expected to become clearer as the next election approaches.
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