Revenue in Aotearoa

The Government collects around $100b revenue in tax. This revenue represented 33.78% of GDP in 2022*, which was a rise on the previous decade. In 2021/22 individual income tax accounted for 51% of tax revenue, GST for 25%, corporate tax for 20%, and other tax around 4% as illustrated in the pie chart below.

Tax Rates in Aotearoa

Income tax

Note: you only pay the relevant tax rate on the money you earn over each of the tax
thresholds. For example, no one earning over $180,000 has to pay 39% on all their earnings,
only on the amount earned over $180,000.

GST
GST is a flat rate tax of 15% that is added to the price of most goods and services when you
buy them.

Company tax
The standard company tax rate that applies to most companies is 28%.

Expenditure in Aotearoa
In 2021–22, the Government expected to spend the following amounts in the areas below. Note that NZ Superannuation constitutes around 41% of expenditure on social security and welfare.

Sources: Inland Revenue Annual Report 2021–22

International Comparisons
New Zealand is not a high tax country. The revenue collected in 2021/22 represented a higher proportion of GDP than has been the case for most of our recent history and probably reflects the impact of Covid 19. It is lower than the OECD average and significantly lower than many of the countries we like to compare ourselves with. We also rely more heavily on individual income tax and GST than most countries that we would like to compare ourselves with in the OECD. Unlike many other countries our income tax settings do not include a tax free band at the bottom and GST is a regressive tax that requires all tax payers to pay the same tax rate of 15%

(source: OECD Data https://data.oecd.org)

One of the reasons that these countries rely less on income tax and GST is that they more systematically tax wealth or the returns on wealth as the following table on capital gains tax rates demonstrates.

(Source: PWC. https://taxsummaries.pwc.com/quick-charts/capital-gains-tax-cgt-rates)

*When a year is referred to on this page, it indicates the financial/tax year ending 30 June that year.