'An accident waiting to happen': Accountants plead for Capital Gains Tax delay

Accountants: plea for CGT law change post-election. Photo/Getty

New Zealand and Australian accountants want the Government to delay introducing legislation for any capital gains tax until after next year's election, saying doing so before then would be too rushed.

John Cuthbertson, the New Zealand tax leader for Chartered Accountants Australia and New Zealand, says it would be wrong for any CGT legislation to be introduced before next year's election.

John Cuthbertson, calling for a CGT delay post-election. Photo/supplied

The organisation, which has more than 120,000 members, says the timeframes would be too tight if this Government planned to move and change the system before later next year.

"A capital gains tax will be a big change for taxpayers and it's crucial that the necessary legislation is concise, efficient and clear, that is, it does the job. Good tax legislation takes time. From what we can see at the moment, there is not enough time for the Government to fully consult and then legislate, to meet their own deadline," Cuthbertson said today.

The Government has received the much-anticipated Tax Working Group report and says it will respond to its recommendations in two months' time. But the report won't be made public until later this month.

New tax policy is not expected to come into force until around April 2021, after the 2020 election.

Finance Minister Grant Robertson said that would give New Zealanders the chance to vote on any decisions made by the Government.

The report is due to be released to the public on February 21 and the Government would then give an initial response.

Before then, it would be analysed by officials and discussed with coalition and confidence and supply partners. It would be presented to Cabinet on February 18.

Cuthbertson said that rushed policy design and implementation will lead to unclear legislation and undercut the certainty taxpayers require. He described it as "an accident waiting to happen."

"We urge Government to reconsider whether taking a fully enacted capital gains tax legislation on the election campaign trail is, in fact, going to produce the best policy outcomes.

"For voters to understand what's changing, setting out the detailed policy design should be sufficient. Deferring the enactment of legislation will provide the additional time needed to ensure the legislation is sound," Cuthbertson said.

"Our tax system is based on taxpayer trust. Certainty, or at least predictability, flows from coherent tax law and administration. When you rush complex legislation, mistakes and unintended consequences will inevitably result," he said.