New Zealand has one of the lowest tax burdens for high earners of any major economy, according to a new study by UHY, the international accountancy network.
New Zealand has the 8th lightest tax burden out of 25 countries, ranked by UHY according to how much tax and social security it takes from its highest earners’ wages (on a salary of US$1.5m – see table below).
UHY notes that New Zealand is making itself more attractive to high earners than neighbouring Australia, which levies 46% in tax on a salary of US$1.5m, compared to New Zealand’s 32.6%. However, UHY also notes that New Zealand does not have a compulsory retirement savings scheme and individuals do not make social security contributions other than as part of normal Income Tax and ACC levies. Instead, individuals have the choice not to participate in KiwiSaver or choose to contribute 3%, 4% or 8% of their gross earnings. The data used in this survey assumes that the individual has chosen not to participate in KiwiSaver, even though there are significant incentives for participation. Furthermore, retirees’ are also entitled to a state-funded pension and any savings amassed through KiwiSaver are intended to supplement the pension.Details