WELLINGTON: New Zealand’s Parliament has passed legislation to increase income tax thresholds for lower- and middle-income earners.
In its Budget, announced on May 24, the Government said that the lowest tax bracket, under which a 10.5 percent tax rate applies to income up to NZD14,000 (USD9,871), would be increased to NZD22,000. The next tax bracket, which features a 17.5 percent rate, will be hiked from NZD48,000 to NZD52,000. There is no tax exempt threshold in New Zealand.
The increases to the thresholds would apply from April 1, 2018, providing the current governments wins the upcoming election. Parliament approved the measures on May 26.
The Government said this will result in a tax reduction of NZD11 a week for people earning NZD22,000 or more, rising to NZD20 for those earning NZD52,000 or more.
The Budget includes plans to simplify the tax and transfer system. The legislation approved on May 26 would also repeal the Independent Earner Tax Credit.
