IN BRIEF: IMF Report on NZ Calls for Tax Reform

Structural policies should aim at promoting durable and inclusive growth, particularly via tax reform.

That's the view of the International Monetary Fund's latest Staff Concluding Statement of the 2023 Article IV New Zealand Mission.

It goes on to say:

"Structural policies and reforms should promote durable and inclusive growth. Revenue policy has a role to play in aligning tax collection with long-term economic priorities. A well-designed tax reform could allow for lower corporate and personal income tax rates by broadening the tax base to other more progressive sources, such as comprehensive capital gains and land taxes, while also addressing fiscal drag and improving efficiency."

It continues:

"Over the longer term, fiscal policy will need to maintain an appropriate balance to address long-term structural needs such as preparing for the costs related to aging, closing productivity gaps, and investing in climate change-related priorities. To that end, there is a need to revisit the design of revenue measures via tax reforms that will best serve New Zealand’s long-term prospects."

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