Government has received capital gains tax recommendation

Finance Minister Grant Robertson has received the Tax Working Group's final report. Photo/File.

Finance Minister Grant Robertson and Revenue Minister Stuart Nash have confirmed that they have received the Tax Working Group's final report - widely expected to recommend a Capital Gains Tax.

But details of the report will stay under wraps until a public release on February 21 and formal response to the proposals from the Government won't be released until April.

"The Final Report will now be analysed by officials, discussed with Coalition and Confidence and Supply partners, and then presented to Cabinet on 18 February," the Government said in a statement this morning.

"The Tax Working Group will hold a media briefing on 21 February to release the Report, and the Government will give any initial responses at this time."

Within the tax industry, it is expected that the report will recommend a broad and comprehensive capital gains tax set at the marginal tax rate with few if any concessions or exemptions - other than the family home.

That has prompted speculation that the Government will have to soften the recommendations or face very difficult job selling the policy in the next election.

The Working Group was mandated to ensure any proposal was revenue neutral for the Government.

Based on estimates that the CGT could generate around $300 million in Crown revenue in its first year and as much as $6 billion by 2031 - that could mean any policy changes come with tax cuts for many workers.

In the statement today the Government reiterated that any policy changes arising from the report would not come into force until 1 April 2021 - giving New Zealanders the chance to vote on any decision it makes.

Tax Working Group chairman Sir Michael Cullen told the Herald last week that the report should not be viewed as "as a take it or leave it" proposal for the Government

"People are assuming because there is a report it has to happen," he says. "There is a long way to go in terms of internal government discussions, in terms of discussion papers, the generic tax policy process, select committee and then, of course, a small thing called the election," he said.

Click this link to read the full feature article: Capital Gains Tax debate about to go Nuclear