The Government is to press ahead with a tax break for Maori authorities, despite opposition MPs calling it racist.
Under the tax legislation, the new withholding tax rate on Maori authorities would drop from 25 per cent to 19.5 per cent.
The Government has argued that 90 per cent of authority members
are within the low-income tax bracket and the move would save them having to claim a return as they would with a company.
The Taxation (Annual Rates, Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill, which makes the changes, was reported back from a select committee yesterday with its intent intact despite a number of amendments.
Changes included more tightly defining what a Maori authority is and protections from abuse by high income members.
The majority of committee members argued that the lower tax rate was being introduced due to the low incomes of authority members.
However, National and New Zealand First members labelled the low income argument "specious", claiming the tax rate was based on race and was not being extended to other low-income people.
The committee also recommended that Parliament:Pass proposals to give Inland Revenue wider powers to seize documents and gather information.
Confirm tax rates for the 2002-2003 year.
Allow for taxpayers' past record of compliance to be taken into account when penalties are imposed.
Impose a penalty on promoters of abusive tax avoidance schemes.
- NZPA
