Revenue Minister reiterates need for data on high-income earners' tax - National sceptical

Revenue Minister David Parker. Photo / Mark Mitchell

The National Party is sceptical of the motivations behind the government's plan to make the tax system more transparent.

Revenue Minister David Parker plans to introduce a bill - called the Tax Principles Act - which would make regular reporting a legislative requirement.

Inland Revenue is collating previously unprocessed data on how much tax the country's wealthiest people pay.

Parker told Morning Report a lack of information on high income earners' tax had proved to be a problem overseas but it was even less clear in New Zealand.

"The survey measures we resort to assess that have proven to be ineffective at the top because the highest concentration of wealth ever found is $20 million dollars in a country that's got billionaires.

"We've really got no idea and therefore people can't asses whether middle income earners are paying a higher rate of tax than the wealthy."

He said attaining data on the level of tax paid by wealthy people would be key to any future political debate on tax reform.

However, he reiterated that Labour had no tax reform plans in place ahead of next year's election.

Parker said the proposed Tax Principles Act would not bar future governments from altering tax policies like GST tax.

"You can't take the politics out of tax and I'm not trying to.

"What I'm saying is that we need to have an understanding about what rates of tax are actually paid and then politicians and voters can have a debate about what tax rules ought to be but we ought not to be having a debate about what the facts are when the facts can't be proven."

Parker said there was a feeling of unfairness around the current taxation of middle income earners.

He said if wealthy people were found to not be paying their fair share of tax then it deserved to be addressed with a debate based on facts and data.

National finance spokesperson Nicola Willis said there was nothing stopping the minister asking for information on how the tax system was working.

Willis said it seemed the bill was more about reviving plans for a capital gains tax.

Prime Minister Jacinda Ardern has ruled out introducing such a tax while she is prime minister.

Willis said National would analyse the new bill before deciding if it will support it.

Meanwhile, National Party leader Christopher Luxon said the reason for the government's new tax legislation was unclear.

Luxon told Morning Report Parker's speech yesterday was confusing and it was not clear what he was trying to achieve.

"The IRD is quite capable of doing full tax audits and investigations of people whether they're wealthy or otherwise," he said.

Luxon said wealthy people pay tax on income, business and savings.