The Government has been advised to consider \”significant changes\” to make New Zealand’s tax system fairer and more effective.

\”Put simply, the tax system is broken and needs to be fixed. We’ve suggested a number of ways this can be done,\” said Professor Bob Buckle, chair of the tax group which released its report today.

Raising GST to 15 per cent and cutting personal income taxes are key recommendations in the report.

Buckle said there was a \”once-in a generation chance for New Zealand to get a world-class tax system , one that’s set up to meet the challenges of the 21st century\”.

Keeping the current system is not an option, says the report.

\”The Group’s strong view is that reform is necessary if New Zealand is to have a fair tax system that minimises the costs of raising taxes, reduces barriers to productivity and growth and positions it well for future challenges,\” said Buckle.

Prime Minister John Key yesterday indicated the Government was open to reform which traded personal income tax cuts for some form of tax on investment property.

Key also said he could not rule out an increase to GST.

The main recommendations of the working group are:

• Align the top personal, company and trust tax tax rates.

• Make the company tax rate competitive with other countries, particularly Australia.

• A widespread reduction of personal tax rates and increasing GST to 15 per cent.

• Most members of the group also supported a \”low rate land tax\”.

Reference: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10621245