New Zealanders work longer to pay their taxes

30 April 2007

New Zealanders work longer to pay off escalating annual tax burden

The level of tax debt facing New Zealanders is climbing at an alarming rate, according to early research by leading national accounting firm, Staples Rodway.

Tax Freedom Day 2007, the day Kiwis have officially paid off all their tax for the year and from then on every dollar earned goes into their back pockets, is likely to fall even later than last year's June 1 date.

Roger Thompson, Staples Rodway Tax Director, says preliminary research indicates New Zealand's Tax Freedom Day in 2007 could potentially be up to a week later than it was in 2006 and two weeks later than 2005.

"If this is correct New Zealand's Tax Freedom Day would be nearly a month later than Australia and later than the UK for the first time since 1997," says Mr Thompson.

In 2006 the average New Zealander had to work 151 days, or nearly six months of the year, to pay off all their taxes including income tax, local body rates and other taxes such as petrol tax, cigarette tax and alcohol levies.

Staples Rodway expects to announce a definitive date for Tax Freedom Day 2007 shortly.

Staples Rodway's Tax Freedom Day research - which is the only internationally benchmarked research to compare New Zealanders directly with taxpayers in Australia, the United Kingdom and the United States of America - paints an increasingly bleak picture for New Zealand taxpayers.

Mr Thompson says the time it takes to pay off taxes in New Zealand has increased significantly since 2002.

"Continuing on last year's trend, the combination of strong tax revenue growth, and a slowing in GDP growth, indicates we are facing a further decline which will result in Tax Freedom Day being even later this year - meaning it is taking longer for Kiwis to pay off their own tax," he says.

"The research also indicates that the gap between New Zealand's Tax Freedom Day and Australia's is likely to widen even further this year. This, combined with the higher wages received by employees in Australia, gives Kiwis even more reasons to move across the ditch," says Mr Thompson.

The Staples Rodway research is based on international methodology, which enables an accurate comparison between the tax burden faced by New Zealander compared to other countries.

Kiwis will be able to determine their own personal Tax Freedom Day by visiting the Staples Rodway website www.staplesrodway.com and going to the Tax Freedom Day calculator once the definitive date for 2007 is set.

ENDS

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