Raising GST

I heard a rumour that GST is being raised, anyone know anymore about it, such as when and by how much???

TIA

I didnt get the full story, but heard they are considering raising it to 15% but there was no time frame mentioned.

They seem to be cutting taxes to "help even things out" at the same time, but I need to look into that further, I only caught the end of the news between listening to Elmo songs with Issy.

Details will be announced in this years budget which is due out 20 May.

I agree FreeSpirit! And to remove GST from fruit and veges - again, just like Oz!!!

I got the impression it's going to be 15% from May IF they decide to do it.

Seems the beneficiaries will be approx $5 a week better off tax-wise when/if the tax rate is reduced, but the big CEO's etc will be approx $1000 per week better off...

What I DO like, however, is that the 'property kings' of NZ will have to start paying taxes on their properties instead of claiming back 'depreciation'. We personally know of one guy who claimed back $50k in 'depreciation' over a few years on his rental property, but when he sold the property he made a killing, so the IRD made him pay back the $50k!!! Good job I say!!!

For me this will mean my job will be busier (I am a PA in one of the world's biggest real estate companies) cause more properties will be on the market as the Property Kings sell up, and in turn I will get an immense amount of satisfaction watching those who can't currently afford to buy a home (because of the inflated housing prices) be able to go and buy a home!

So there ARE some good things in the upcoming budget - but as per usual it's all very controversial!

The actual tax cuts haven't been disclosed yet, but speculation is the top tax rate will reduce from 38% to 33%, and 19% down to 15% I'll be interested to see where the cut off, as we don't get any assistance from the govt and our combined income is less than 100k.

As pretty much most of my wages goes on debt servicing it will be good to have a few more $$ for the mortgage.

There are a number of property investors not paying any tax, which the govt is wanting to stop.  

FreeSpirit wrote: Personally I feel that if they are going to raise it (which brings it in line with the GST in Oz) then they also need to look into removing GST from baby gear (which is how it is in Oz) to help families out. There is no way they will be able to force employers to raise wages by 2 and a half percent.

How would you define "baby gear" though? I didn't realise Oz did that, I know they give families $3000 when they have a baby because they want to increase the population.

Wages won't be increased by 2.5% just because there is a GST increase, however the proposed tax cuts are meant to offset the additional GST which means that theoretically no one should be worse off. In saying that people will still whinge.

STINK!!!!

i dont know much, but wouldnt it only increase the inflation rate, becuse if wages and GST go up, wont every other price have to be increased too, so we are all no better off, we just have to pay more for everything and work out GST at a different rate???...

Oh, and in someways I hope that they dont adopt Australias rate, they have a huge list of things that dont have GST (like educational books and takeaways) and other things that do have GST (including eat in meals!) How confusing would all that be!!

STINK!!!

LittleSal wrote: The Govt has to do something as the country is currently borrowing $250million per week! Come budget time that means spending will be cut and additional revenue will need to come from somewhere. There really aren't that many options available and we can't keep expecting the govt to stay at the status quo. We really need to think beyond the price of our groceries and look at the economy as a whole.

I agree with that to a point, but the price of groceries does seriously affect some people. My groceries have gone up by about $50 for my shop buying the same things, we may just be able to absorb that, but not everyone can.

My inlaws plus a friend of mine who are well in the top tax bracket don't think their taxes should be cut by that much even though they would seriously benefit from the proposed changes.

[]

FreeSpirit wrote: Personally I feel that if they are going to raise it (which brings it in line with the GST in Oz) then they also need to look into removing GST from baby gear (which is how it is in Oz) to help families out..

GST is 10% in Aus isnt it?? Hmm I didnt realise there was no GST on baby gear. I always thought it was included like with all other goods.

caliandjack wrote: LittleSal wrote: The Govt has to do something as the country is currently borrowing $250million per week! Come budget time that means spending will be cut and additional revenue will need to come from somewhere. There really aren't that many options available and we can't keep expecting the govt to stay at the status quo. We really need to think beyond the price of our groceries and look at the economy as a whole. Agree with you on this one, all the benefits like wff and 20 hours free child care have to be paid from somewhere. I always think the only way to improve the economy is to make it easier to do business, and thus create jobs etc.

I agree as well.

Even if they do raise the GST to 15% I don't think prices will immediately be increased to compensate. If anything it will affect the margins of businesses as the majority of companies already have prices printed on items for the coming months and so are unlikely to want to print a whole lot of new tags and change all the systems.

For example something that is listed as $20 now includes $2.22 of GST so $17.78 actually goes profit to the company, whereas in a few months it will be $2.61 of GST and $17.39 of profit for the company. I doubt the company would put the price up to $20.45 which is what it would be at 15% gst keeping the $17.78 profit amount - does that make sense, sorry I'm rambling.

Also on the matter regarding taking GST off certain things, this unfortunetaly seems a good idea but realistically this will create a lot more tax compliance costs for the company which they are more than likely to pass on by raising prices for the consumer.