What is it?
The reduction in the rate of GST, or its elimination entirely.
What is the problem that this change would seek to address?
Because GST is a flat rate tax, it takes the biggest chunk out of the lowest incomes, and is therefore regressive. Reducing or removing it would make the system more progressive.
What are the advantages?
As above, it would make the system more progressive.
What are the disadvantages?
GST makes up a very large part of New Zealand’s tax revenues: around $37 billion, or 30% of the total, in 2022. Removing or reducing it to any substantial degree would be very expensive.
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